Euro fell against the dollar in the Asian session to erase gains made yesterday. Risk was off again after comments by Federal Reserve Chairman Ben Bernanke disappointed. He refrained from signalling immediate steps the U.S. central bank might take to spur growth in the world’s largest economy.
Before Bernanke’s comments , market sentiment was high yesterday as the central bank of China announced its first interest-rate cut since 2008 to spur growth. EURUSD opened in Asia at 1.2560 and fell to a low of 1.2512. Focus turns to data due later from Germany, which forecasts says exports fell in April. This would be negative for euro.
GBPUSD opened in Asia at 1.5526 and fell to 1.5481. Yesterday the pound gained after the Bank of England opted not to change its monetary policy and did not expand QE. Interest rates were held at 0.5 percent.
Yen gained against the dollar as risk was back on and the safe haven Japanese currency as back in demand. USDJPY fell to 79.22 from 79.74. EURJPY fell to 99.20 from 100.25. Gains in the yen are expected to be limited against the dollar ahead of the Bank of Japan policy meeting due next week. Some speculate that the BOJ might undertake monetary easing which would weaken yen.
Aussie was under selling pressure after Bernanke’s disappointing comments. AUDUSD was in need to retrace after a strong rebound recently from 8-month lows. The pair eased down to 0.9836 from, down from parity it reached yesterday.