Saturday, 27 August 2011

Dollar Drops After Bernanke Speech & GDP Report

The US greenback fell nowadays once the report showed that the US economy expanded with slower pace than was predicted by specialists and Federal Reserve Ben S. Bernanke hinted at risk of further stimulus.

According to the preliminary report, US gross domestic product grew one.0 % within the second quarter of 2011, following the rise by zero.4 % within the initial quarter. The advance estimate promised growth by one.3 percent, whereas market participants expected rise by one.1 percent.

Bernanke said nowadays at the Federal Reserve Bank of Kansas town Economic Symposium in Jackson Hole, Wyoming, that the Fed has suggests that to any stimulate the US economy, stating “the Federal Reserve features a vary of tools that might be used to produce further financial stimulus”. Chairman added that within the end of the day the economy will overcome its current difficulties:

Notwithstanding the severe difficulties we currently face, I do not expect the long-run growth potential of the U.S. economy to be materially affected by the crisis and the recession if — and I stress if — our country takes the necessary steps to secure that outcome.

The speech was well received by markets and stocks advanced, pushing the quality & Poor’s five hundred Index up zero.7 % once it earlier fell two %.

EUR/USD climbed from one.4377 to 1.4476 as of 17:00 GMT nowadays, following the drop to one.4328. GBP/USD rose from one.6278 to 1.6341 once it dropped to one.6206 earlier. Meanwhile, USD/JPY tumbled from seventy seven.44 to 76.67.

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