By TraderVox.com
Tradervox (Dublin) – The dollar almost touched its lowest level this month against the euro after the Fed chairman Ben S. Bernanke indicated that the low interest rate was still necessary despite the positive reports that have been coming from the US. The Fed chairman looked like he was not yet convinced of the economic growth despite many analysts and leaders indicating that the Federal Reserve might change its monetary policy as early as next year. His remarks reduced the demand for the US assets hence sending the greenback to almost its lowest against the euro.
The greenback has been weak against 15 of the 16 major currencies this year and the comments by the Fed Chairman have rekindled speculations that the Fed might make another round of quantitative easing. The yen was also weaker due to concerns on the Asian equities. The euro has been strong since the start of the week as traders speculate that the region’s finance ministers’ meeting will lead to the creation of a stronger firewall. The meeting is scheduled to be held at the end of the week.
Some analysts are predicting hard times ahead for the dollar as traders have taken Bernanke’s comment to mean that there are still chances that a third round of QE will be made. In Tokyo, the euro traded at $1.3362 from yesterday’s close of 1.3359. The euro had touched $1.3368 which is the strongest it has been against the dollar since February 29.
The dollar was strong on the yen trading at 82.89 yen from yesterday close 82.82 yen. The euro rose by 0.1 percent against the yen to trade at 110.75. The euro had gained 1.3 percent yesterday to trade at 110.65 yen. The euro is showing volatility as German Chancellor Angela Merkel and Finland’s prime Minister indicated that they would support efforts to increase the firewall kitty and the merger of the European Stability Mechanism and the European Financial Stability Facility to make a total of 750 billion Euros in firewall kitty.
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