Forex Trading News – EUR trades above $1.47 after Bernanke’s speech

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The Federal Reserve indicated today that it is in no rush to scale back its support for the US recovery as it cut its forecast for 2011 economic growth. USD cut its gains versus the JPY due to Bernanke speech in which he said that he expected weaker US output growth in the first quarter of 2011. The Fed also said it expects full year US GDP growth to range between 3.1% and 3.3%, compared to an earlier 3.4% – 3.9% percent forecast. USD also held near a 16 month low versus the EUR. EUR/USD opened the session at 1.4672 and moved as high as 1.4776.

USD fell to 82.08 against the JPY from an opening session price of 82.20.

GBP rose today due to data that showed that the UK economy grew 0.5% in the first quarter, baffling speculation about a weaker number. The market had expected a reading of around 0.3% or 0.4% in GDP and there was a collective sigh of relief. Analysts said the UK GDP data was probably too weak to prompt a BoE rate rise as soon as next month, though the data still left open the possibility of a rate hike in the summer. GBP opened the session at 1.6576 and moved as high as 1.6633.

CAD moved higher against USD today, after the Fed said that it would keep rates exceptionally low for an extended period. USD/CAD opened the session at 0.9520 and moved as low as 0.9509, falling from a session high of 0.9574.

Gold rose to a record high hitting 1529.9 today after the Fed announcement that it would keep US interest rates very low. This was the 8th record high in 9 trading sessions for spot gold. Gold rose more than 1% after the Fed said it would end its $600 billion bond buying stimulus program in June as planned. The Fed also said it was in no rush to raise short term interest rates that have remained near zero to support the US economy.