The dollar remained lower against the euro after the Federal Reserve signaled gains in employment aren’t yet sufficient for policy makers to move closer to reducing stimulus measures. The Fed said the nation’s unemployment rate will hit the central bank’s threshold for raising interest rates sometime in 2015. The Fed under Chairman Ben S. Bernanke will continue buying $85 billion of bond per month, known as quantitative easing, or QE, as it seeks to reduce the unemployment rate that hasn’t fallen below 7 percent since November 2008.
The euro strengthened from a four-month low against the dollar as Cyprus sought alternatives to the European Union plan to help the nation avoid a banking collapse.
Bernanke, starting today, will cut the time between the release of post-meeting statements by the Federal Open Market Committee and his news briefings, giving investors less opportunity to misperceive the Fed’s intent.
In recent presentations, he has pledged to sustain easing, defending monthly bond purchases during congressional testimony last month and warning that “premature removal of accommodation” may weaken the expansion. The Fed is targeting a reduction of the jobless rate to 6.5 percent while keeping inflation to 2.5 percent.
Cyprus hasn’t reached any deal with Russian investors for the sale of Cyprus Popular Bank Plc, government spokesman Christos Stylianides said in a telephone interview in Nicosia today. A preliminary deal to sell the bank to Russian investors was reached, Kathimerini Cyprus reported earlier, without citing anyone.
The pound advanced as Chancellor of the Exchequer George Osborne said the government will keep the Bank of England’s 2 percent target inflation target and allow room for “tradeoffs” in the decision-making process. Sterling pared a drop versus the euro. The government is reviewing the central bank’s remit, including the potential provision of forward guidance on interest rates, Osborne said today in parliament. Government bonds pared a decline.
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