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EUR/USD update (1st Mar 2012, 04:00)

In US trade, the euro saw a massive pullback from its Asian session high of 1.3486, as investors discounted the likelihood of further quantitative easing from the Fed after comments from Ben Bernanke.

Speaking before the House Financial Services Committee in Washington, Mr Bernanke spoke of the potential spike in inflation as a result of rising gasoline and oil prices and also noted that the unemployment rate, while still a long way from normal, had fallen faster than the Fed had anticipated. Reading between the lines, the market quickly and correctly surmised; no QE anytime soon! This precipitated a rush of money into the USD and a sharp sell-off in risk currencies and commodities. Earlier in the European session, the euro had seen some modest slippage after the ECB announced that some 800 banks had borrowed €529 billion in 3-year money under its LTRO program, but these losses accelerated after Mr Bernanke’s comments.

Having ended yesterday’s Australian session around the 1.3480 level, the euro slumped over the course of the US session to eventually close at 1.3325. Upon reopening for Asian trade, the euro is little changed, continuing to trade in the 1.3320 range.

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EUR/USD update (1st Mar 2012, 04:00)

In US trade, the euro saw a massive pullback from its Asian session high of 1.3486, as investors discounted the likelihood of further quantitative easing from the Fed after comments from Ben Bernanke.

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