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The dollar weakened against all major currencies after Federal Reserve Chairman Ben Bernanke reiterated that the central bank is ready to provide additional economic stimulus if needed and investor demand for higher-yielding assets increased.
“When we began this program, we certainly did not expect it to be a panacea for the country’s economic problems,” he said. Bernanke said Fed officials still believed the unemployment rate would decline to 8.6%-8.9% by the fourth quarter. The jobless rate reached 9.2% in June from 8.8% in March.
Earlier the Australian and New Zealand dollars advanced against the greenback after better-than-expected economic data on China.
The GDP growth of China, Australia's first largest and New Zealand's second-largest trading partner, rose at an annual pace by 9.5% between April and June, down from 9.7% in the previous quarter. But its data on industrial production (act. 15.1% vs. con.13.2% and prev. 13.3%) and retail sales (act. 17.7% vs. con.17.0% and prev. 16.39) appeared to be well above median forecasts.
The euro also found support from positive data from China’s National Bureau of Statistics as it weighed on haven demand for the dollar and on speculation that China’s foreign exchange reserves had reached a record $3,179bn.
Italian bonds gains for the second day, pushing the yield on the 10-year security down 12 basis points, weakening concern that EU debt crisis may spread to Italy.
The gold prices hit a record high after the Fed's meeting and currently is at $98.89 per ounce (+1.46%).
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