BLBG:Euro Approaches 8-Week High Versus Dollar Before Bernanke
The euro rose toward an eight-week high against the dollar before Federal Reserve Chairman Ben S. Bernanke delivers his annual speech on monetary policy at the central bank’s symposium in Jackson Hole, Wyoming.
The dollar weakened against all but two of its 16 major counterparts after Atlanta Fed President Dennis Lockhart said the U.S. central bank has a tough decision on whether to add further stimulus to promote a stronger economic recovery. Bernanke will deliver his speech at 10 a.m. New York time. His address in 2010 preceded a second round of quantitative easing to support growth.
“The market is getting positioned for a dovish Bernanke, so the dollar is under pressure,” said Geoff Kendrick, head of European currency strategy at Nomura International Plc in London. “There’s a lot of uncertainty about what he might say, so the market will be a bit choppy until then. If he’s not dovish at all, then the dollar will rally.”
The euro advanced 0.4 percent to $1.2557 at 10:27 a.m. London time, heading for a 0.4 percent gain this week. The shared currency climbed to $1.2590 on Aug. 23, the strongest level since July 4. It appreciated 0.4 percent to 98.67 yen. The dollar dropped 0.1 percent to 78.57 yen.
The Dollar Index (DXY), which IntercontinentalExchange Inc. uses to track the U.S. currency against those of six major trading partners, fell 0.3 percent to 81.424.
“It is a close call, really,” Lockhart, who votes on monetary policy this year, said yesterday in a CNBC interview from Jackson Hole. “I am not overly concerned with the longer- term costs of more action but at the same time I see limited benefit from more action.”
To contact the reporter on this story: Emma Charlton in London at echarlton1@bloomberg.net
To contact the editor responsible for this story: Paul Dobson at pdobson2@bloomberg.net
