Euro Broadly Higher on ECB Comments

During the Asian trading session, the U.S. Dollar held close to an 11-month trough versus the common currency Euro following comments made by Ben Bernanke who suggested that the ultra loose monetary policy was likely to be in place for many months to come. The Federal Reserve Bank chief cautioned that the recovery of the U.S. economy was still very fragile and that risks remained given the U.S. Congress’ political deadlock on the way forward as regards the burgeoning deficit. Another Federal Reserve Bank official reiterated his belief that the Fed’s asset purchase program would likely continue near through to the year’s end.

As reported at 2:15 p.m. (JST) in Tokyo, the EUR/USD pair was trading at $1.3359, retreating from an overnight high in New York of $1.3404. The U.S. Dollar was also lower against other growth-linked currencies including the Aussie Dollar; the AUD/USD pair was trading at $1.0565 close to the $1.0600 peak struck last week and well off of Monday’s low of $1.0521.

In contrast the Euro has been finding some support following comments made by ECB officials who said that they expect an economic recovery later this year as indicators are already showing improvement. The Euro rallied 1.2% against the Swiss Franc with the EUR/CHF pair trading to a high of 1.2388; currently the pair is trading at 1.2352.