Forex: Wednesday’s review
01.03.2012, 08:55

Forex: Wednesday’s review

 


Yesterday the
dollar rallied against the euro and yen after comments from Federal Reserve Chairman Ben S. Bernanke reduced speculation the central bank will provide more monetary stimulus. The dollar erased earlier losses after Bernanke said there are “positive developments” in the labor market, adding that “the job market remains far from normal.” Bernanke said that “in light of the somewhat different signals received recently from the labor market than from indicators of final demand and production, however, it will be especially important to evaluate incoming information to assess the underlying pace of economic recovery.”

The euro weakened earlier after the European Central Bank awarded 529.5 billion euros ($712 billion) in a second round of three-year loans to banks, increasing the supply of euros. The 17-nation euro declined versus all but one of its 16 major counterparts as the ECB auction of three-year loans surpassed the 470 billion euros forecast by economists. The Frankfurt-based central bank said it will lend the funds to 800 financial institutions. In its first three-year refinancing operation in December, 523 banks borrowed 489 billion euros.


EUR/USD: yesterday the pair fell to a figure, lowered below $1.34.

GBP/USD: yesterday the pair rose, updated February’s high.

USD/JPY: yesterday the pair gain, fixed above Y81.00.


UK data starts early on Thursday with the 0700GMT release of the latest Nationwide House Price index. UK data also sees the Markit/CIPS  Manufacturing PMI at 0928GMT. At 1000GMT, Bank of England MPC member David Miles delivers a speech at a  ro.manchester Business Conference. This morning also sees the release of the final Manufacturing PMI figures from core-Europe, including France at 0848GMT, Germany at 0853GMT and the main EMU data at 0858GMT. EMU data at 1000GMT includes flash HICP, which is expected to come in at 2.6%, while at the same time January unemployment is expected to remain at 10.4%. The scheduled US data calendar starts at 1330GMT when initial jobless claims. PCE is expected to also rise 0.4% in the month, as retail sales rose 0.4% and were up 0.7% excluding motor vehicle sales. The core PCE price index is forecast to post another 0.2% rise. At 1500GMT, Federal Reserve Chairman Ben Bernanke repeats his prepared semi-nnual monetary policy report to the Senate Banking Committee, followed by Q&A. At 1730GMT, Atlanta Fed President Dennis Lockhart speaks to the Atlanta Fed's Banking Industry Outlook Conference. Late US data includes the 2100GMT release of M2 Money Supply. Later on, into 0300GMT Friday, San Francisco Fed President John Williams discusses the

economy on a panel at the Hawaii CFA Economic Forecast Dinner.

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