The Swiss franc slumped nowadays after Federal Reserve Chairman Ben. S. Bernanke spoke nowadays, improving sentiment on markets, while rumors abound that Switzerland’s policy manufacturers are preparing another action to weaken the Swiss currency.
There are totally different opinions on what steps Switzerland is going to take in order to weaken its currency. Some analysts speculate that the Swiss National Bank is preparing another intervention. Some experts predict that native banks may impose charges for franc deposits. regardless of the truth is, the rumors undermine franc’s strength.
Optimism, caused by the speech of Chairman Bernanke, influenced the franc even a lot of, perhaps. Jeremy Stretch, head of currency strategy at Canadian Imperial Bank of Commerce, thought:
What Bernanke said suggested was perhaps the world’s economic weakness is not so bad that it warrants another round of QE, and that helped to damp demand for the franc. There has also been speculation about the SNB’s possible further action on the franc, which makes the market cautious.
USD/CHF climbed from 0.7928 to 0.8060 as of 20:11 GMT nowadays after touching the daily high of 0.8157, the best level since July twenty two. EUR/CHF advanced from 1.1401 to 1.1684. CHF/JPY sank from ninety seven.61 to 95.05, while earlier it reached very cheap worth since June twenty — ninety four.44.
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.
The Great Britain pound weakened against the japanese yen and slowed its advance versus the US dollar when the report showed the united kingdom economy grew with slower pace in the second quarter.
The revised figure for growth of UK gross domestic product in the second quarter of 2011 was 0.2 percent, constant as in the preliminary estimate. It indicates slower expansion, compared to 0.5 p.c growth in the first quarter. The report additionally mentioned that several special events affected Britain’s economy in Q2: the additional April public vacation, the royal wedding and the aftereffects of the japanese tsunami.
GBP/JPY fell from 126.12 to 125.68 nowadays as of 9:24 GMT and touched the daily low of a hundred twenty five.41 earlier. GBP/USD climbed from 1.6278 to 1.6332.
The Australian dollar strengthened today as the statement of nation’s central bank Governor Glenn Stevens spurred the speculation that the Reserve Bank of Australia won’t cut interest rates.
Stevens spoke today to accommodate of Representatives Standing Committee on Economics, telling regarding the uncertainty and issues of the global economy. Despite these challenges, the Governor was rather optimistic:
But at this point in time, our terms of trade are at a record high, while our unemployment rate remains low. Inflation bears careful watching, but we can keep it under control. Our banks are strong, our currency is sound and our sovereign credit position is in the international top tier.
The comment regarding inflation made economists speculate that the RBA hasn’t finished with tightening.
AUD/USD jumped from 1.0429 to 1.0497 today as of 8:50 GMT. EUR/AUD fell from 1.3780 to 1.3750, while earlier it reached the intraday low of 1.3713.
