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Forex - EUR/USD firms in wake of dovish Bernanke comments

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Shutterstock photo - The euro extended earlier gains against the dollar on Thursday though the greenback pared some of its losses after Federal Reserve Chairman Ben Bernanke said late Wednesday that stimulus tools stay in place for now.

Stimulus programs such as the Fed's monthly USD85 billion bond-buying program weaken the dollar to spur recovery.

In U.S. trading on Thursday, EUR/USD was up 0.54% at 1.3052, up from a session low of 1.2962 and off from a high of 1.3206.

The pair was likely to find support at 1.2962, the session low, and resistance at 1.3416, the high from June 19.

The dollar extended Wednesday's losses into Thursday after Fed Chairman Bernanke said the U.S. economy still requires highly accommodative monetary policies just hours after the release of the minutes from the Fed's June monetary policy meeting, which revealed other U.S. central bankers felt likewise.

Fed language sent the dollar plunging, as many investors were expecting more of a timeline as to when the Fed would begin tapering stimulus programs that weaken the dollar to keep interest rates low so the economy will pick up the pace of its recovery.

Meanwhile, official data on Thursday showed that the number of individuals filing for initial jobless claims in the U.S. hit a two-month high last week, rising by 16,000 to 360,000, according to the Labor Department, defying expectations for a drop of 4,000 to 340,000.

A separate report showed that U.S. import prices fell 0.2% on a yearly basis in June, above expectations for a 0.1% decline, while exports prices rose 0.2% year-over-year, undershooting expectations for a 0.4% rise.

Meanwhile in Europe, the European Central Bank said in its monthly bulletin interest rates will remain at currently low levels or even lower for an extended period of time, though the news came as little surprise to many traders, who chose instead to focus on the U.S.

The euro, meanwhile, was down against the pound and down against the yen, with EUR/GBP trading down 0.15% at 0.8627 and EUR/JPY trading down 0.32% at 128.90.

On Friday, the euro zone is to release official data on industrial production.

The U.S. is to round up the week with official data on producer price inflation and preliminary data from the University of Michigan on consumer sentiment. - offers an extensive set of professional tools for the Forex, Commodities, Futures and the Stock Market including real-time data streaming, a comprehensive economic calendar, as well as financial news and technical & fundamental analysis by in-house experts.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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