SF: Dollar Pares Loss as Bernanke Fails to Signal Further Stimulus
Aug. 26 (Bloomberg) -- The dollar pared its loss versus an index of currencies of major U.S. trade partners after Federal Reserve Chairman Ben S. Bernanke said the central bank still has tools to stimulate the economy without signaling when or whether policy makers might deploy them.
The Dollar Index was down for the first time in three days after data showed the U.S. economy grew more slowly in the second quarter than previously estimated. The Brazilian real and Canadian dollar fell against most major counterparts.
The index, which IntercontinentalExchange Inc. uses to track the greenback against the currencies of six major U.S. trade partners including the euro and yen, slipped 0.3 percent to 74.024 at 10:03 a.m. in New York, from 74.279 yesterday. Earlier it fell 0.5 percent.
"In addition to refining our forward guidance, the Federal Reserve has a range of tools that could be used to provide additional monetary stimulus," Bernanke said today to central bankers and economists gathered at an annual forum in Jackson Hole, Wyoming.
Last year at the conference, Bernanke said the Fed would "do all that it can" to ensure a continuation of the economic recovery and that buying more debt might be warranted if growth slowed. Two months later, policy makers announced a $600 billion second round of asset purchases that ended in June.
Policy makers pledged after a meeting Aug. 9 to hold the benchmark interest rate at almost zero until at least mid-2013 after growth that was "considerably slower" than anticipated.
