[B]Market Review[/B] - 19/11/2013 [I]21:53GMT [/I]
[B]Dollar falls broadly ahead of Wednesday’s speech by Fed’s Ben Bernanke
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The dollar declined against majority of its peers on speculation Federal Reserve members will reiterate their pledge to keep monetary policy loose as Fed’s Chairman Ben Bernanke will deliver speech on Wednesday at 00:00GMT.
Although the single currency traded sideways in Asia and spiked briefly to session high at 1.3543 in early European morning, price swiftly pared intra-day gains and fell to an intra-day low at 1.3488 at New York open. However, the pair later rose again n strengthened to 1.3548 in New York morning after Fed’s Vice Chair Janet Yellen said in a letter to a U.S. lawmaker that a “strong majority” of Federal Reserve policymakers think its program of massive bond purchases has helped spur U.S. growth and hiring, but are aware of potential risks.
Versus the Japanese yen, the greenback came under heavy selling pressure in Australia and fell sharply to an intra-day low at 99.57 in Asian morning. However, renewed buying there lifted the pair n price rose to session high at 100.25 in late New York session.
The British pound traded sideways in Asia n despite brief spike to session high at 1.6128 in European morning, price pared its gains n retreated sharply to 1.6060 after a UK debt auction. However, cable later rallied to an intra-day high of 1.6138 in later New York.
On the data front, German ZEW economic sentiment rises to 54.6 from 52.8 previously whilst ZEW current conditions drops to 28.7 from prev. reading of 29.7.
In other news, ECB’s Asmussen said ‘our monetary policy will stay expansionary for as long as needed; too early to exit from loose monetary policy in Eurozone; can act again if inflation situation requires it; would be very careful to cut deposit rate below 0, don’t want to rule out fundamentally; risks to price stability are balanced, no risks of deflation.’
Chicago Federal Reserve Bank President Charles Evans said ‘the Federal Reserve should wait until next year, possibly until March, before beginning to wind down its massive bond-purchase program.’ Evans added that “a couple more meetings to have greater assurance that the labor market improvement is sustainable would be quite welcome.”