Forex: Monday’s review

Yesterday the dollar fell against its higher- yielding counterparts as Federal Reserve Chairman Ben S. Bernanke said accommodative monetary policy is still needed to reduce U.S. unemployment. The decline in U.S. unemployment may reflect “a reversal of the unusually large layoffs that occurred during late 2008 and over 2009,” Bernanke said in a speech in Arlington, Virginia. “To the extent that this reversal has been completed, further significant improvements in the unemployment rate will likely require a more-rapid expansion of production and demand from consumers and businesses, a process that can be supported by continued accommodative policies.”

The euro strengthened against the U.S. currency as Germany said it may back plans to increase the debt-crisis rescue funds before the region’s finance ministers meet March 30. Chancellor Angela Merkel said that Germany may back plans for the temporary and permanent euro-area rescue funds to run in parallel. Ministers are due to discuss plans to combine the temporary European Financial Stability Facility and its permanent successor from July, the European Stability Mechanism in Copenhagen this week.мEuropean sentiment was also buoyed after Munich-based Ifo institute’s German business climate index rose more than expected.

EUR/USD: yesterday the pair gain, fixed above $1.3300.

GBP/USD: yesterday the pair rose on a figure, fixed above $1.5900.

USD/JPY: yesterday the pair restored after Friday falling.

Core-European data all comes early on Tuesday, starting at 0600GMT with German import prices and followed at 0610GMT by German GfK

consumer confidence. At 1300GMT, German parliamentary groups are likely to discuss drafts of ESM and the fiscal compact bills once again, in Berlin. Tuesday is a marathon day for UK policy commentary. UK Chancellor of the Exchequer George Osborne will kick off at 1315GMT with a Treasury Select Committee hearing into his 2012/13 Budget. Back in the UK, Bank of England Governor Mervyn King gives a testimony to the House of Lords Economic Affairs Committee at 1430GMT. US data starts at 1145GMT with the weekly ICSC-Goldman Sachs Mall Sales data. The weekly Johnson Redbook chain store sales data us due at 1255GMT. This is followed at 1300GMT by the

S&P/Case-Shiller Home Price Index.