By Virginia Harrison, MarketWatch
SYDNEY (MarketWatch) — The dollar weakened against most major rivals during Asian trading hours on Friday ahead of Federal Reserve chairman Ben Bernanke’s much-awaited speech at Jackson Hole, Wyoming.
The dollar index DXY -0.26% , which measures the greenback against a basket of six currencies, edged down to 74.141 versus 74.262 in North American trading late Thursday.
All eyes are focused on Federal Reserve chairman Ben Bernanke’s speech due to be delivered at 10 a.m. U.S. Eastern time Friday, in Jackson Hole, Wyoming.
Bernanke used the forum last year to announce a second round quantitative easing, or QE2, which sparked a rush to risk assets.
“It is now possible that simply listing a range of potential future policy options without explicitly ruling out, in particular, additional QE, and which is indeed what we expect, will be considered worthy of a positive risk-market reaction,” strategists at BNP Paribas said. Read more on what to expect from Bernanke.
Strategists at RBC Capital Markets added: “Should Bernanke sound slightly more upbeat than what is implied by a 2.25% 10-year yield, the U.S. dollar should find some support. In this respect, the bar is set relatively low.”.
The euro EURUSD +0.32% rose to $1.4412, from $1.4379 in North American trade late Thursday, while the British pound GBPUSD +0.23% rose to $1.6311, from $1.62870.
Against the Japanese yen USDJPY -0.37% , the dollar traded at 77.30 yen, compared to ¥77.57 late Thursday.
Meantime, in Australia, the Reserve Bank governor Glenn Stevens hosed down speculation of an immediate interest rate cut, which gave the local currency a boost.
The Australian dollar AUDUSD +0.55% recently traded at $1.0477.
“The market is still heavily favoring the Reserve Bank of Australia to embark on a rate cutting cycle, however thus far the rhetoric from the central bank is at odds with that view,” Tim Waterer, senior FX dealer at CMC Markets in Sydney said.
“With the Reserve Bank evidently not trigger-happy with their major tool of monetary policy, there is still an outside chance that we could in fact make it to year end without a rate cut, with the large caveat being that the worst of the global markets sell-off has already come and gone,” he said.
Virginia Harrison is a MarketWatch reporter based in Sydney.
