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06:00 Germany Gfk Consumer Confidence Survey September 5.4 5.2 5.2
The dollar weakened against the euro and the yen slid versus most of its major counterparts amid speculation Federal Reserve Chairman Ben S. Bernanke will tomorrow announce further stimulus for the U.S. economy.
Norway’s krone and Sweden’s krona were the best performers against the dollar and yen as stock market gains in Asia and Europe spurred demand for higher-yielding assets. Speculation has intensified that Bernanke will signal a willingness to embark on a third round of so-called quantitative easing, or QE3, in a speech at Jackson Hole, Wyoming, as the U.S. economy shows signs of faltering. The euro strengthened even after an industry report predicted German consumer confidence will fall.
“The market is treating Bernanke’s speech tomorrow almost like a policy meeting,” said Steve Barrow, the London-based head of Group-of-10 currency research at Standard Bank Plc, wrote in a client note today. “If he signals QE3, it could supports higher-yielding assets like stocks, the Scandinavian currencies and the Aussie and Kiwi dollars at the expense of the U.S. dollar.”
EUR/USD reached $1.4475 in recovering from overnight lows on $1.4380.
GBP/USD holds within the range, limited by $1.6355/95.
USD/JPY traded around Y77.00.
In the UK, at 1000GMT, CBI Distributive Trades data is due, which is followed at 1100GMT when Bank of England MPC member Martin Weale delivers a speech at the Doncaster Chamber of Commerce. Weale has already given a fairly full explanation of his reasons for dropping his rate hike call at the August MPC meeting, but his comments will still be closely-watched.
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