Speaking at the Fed’s annual symposium in Jackson Hole, Wyoming, Bernanke said the persistently high rate of unemployment was a “grave concern” and reiterated that the central bank was ready to provide additional policy accommodation as needed to shore up growth.
Official data on Wednesday showed that the U.S. economy expanded at a seasonally adjusted annual rate of 1.7% in the three months to June, slightly higher than the preliminary estimate of 1.5%, but remained below the 2-2.5% rate required every quarter to hold the unemployment rate steady.
Bernanke downplayed the risks of quantitative easing and said the program had been effective in providing “meaningful support" to the recovery.
Following Bernanke’s speech, the euro climbed to 1.2636 against the dollar, its highest level since July 2, before trimming gains to settle at 1.2576 by close of trade. Against the yen, the dollar fell to 78.17, the lowest level in three-week, before settling at 78.37.
Demand for the euro continued to be underpinned by expectations that the European Central Bank is working on measures to help stabilize the euro zone's sovereign debt markets ahead of its upcoming meeting on September 6.
On Thursday, Italy saw borrowing costs ease at an auction of five and 10-year bonds, reflecting renewed optimism that European leaders are making progress in tackling the region’s debt crisis.
The pound also pushed higher against the dollar on Friday but sentiment on sterling remained fragile as concerns over broad economic weakness kept alive expectations for another round of monetary easing by the Bank of England.
Elsewhere, the Canadian dollar was higher against the greenback on Friday, after official data showed that the Canadian economy grew 0.2% in June, compared to expectations for a growth of 0.1%.
In the week ahead, markets will be focusing on the ECB’s post-policy meeting press conference on Thursday, as investors await more details about the size and scope of the bank’s bond purchasing program from President Mario Draghi.
The U.S. is to release its monthly report on non-farm payrolls on Friday, which will allow investors to gauge the strength of the faltering labor market.
Ahead of the coming week, Forex trading outlook has compiled a list of these and other significant events likely to affect the markets.
Monday, September 3 2012
Japan is to release government data on capital spending, a leading indicator of economic health.
Australia is to produce official data on retail sales, the primary gauge of consumer spending, which accounts for the majority of overall economic activity. The country is also to publish industry data on job advertisements, followed by an official report on company operating profits.
Switzerland is to release official data on retail sales, followed by the SVME purchasing managers’ index.
The U.K. is to release data on manufacturing activity, a leading indicator of economic health.
In the euro zone, ECB President Mario Draghi is scheduled to testify before the European Parliament's Economic and Monetary Affairs Committee, in Brussels. Meanwhile, Spain and Italy are to release official data on manufacturing activity.
Markets in the U.S. and in Canada are to remain closed for the Labor Day holiday.
Tuesday, September 4 2012
The Reserve Bank of Australia is to announce its benchmark interest rate; the announcement is to be accompanied by the bank’s rate statement, which contains insights into current economic conditions for the bank’s perspective. The country is also to release official data on the current account.
Japan is to produce government data on average cash earnings.
In Europe, Switzerland is to publish official data on second quarter gross domestic product, the broadest measure of economic activity and the primary gauge of the economy's health.
The U.K. is to publish industry data on house price inflation, a leading indicator demand in the housing sector, as well as industry data on retail sales. The U.K. is also to release data on construction sector activity.
The U.S. is to publish a report by the Institute for Supply Management on manufacturing PMI.
Wednesday, September 5 2012
Australia is to release official data on second quarter gross domestic product, the broadest measure of economic activity and the primary gauge of the economy's health, as well as data on service sector activity.
Switzerland is to produce official data on consumer price inflation, which accounts for a majority of overall inflation.
Elsewhere in Europe, the U.K. is to release data on service sector activity, a leading indicator of economic health.
Meanwhile, the euro zone is to publish official data on retail sales.
The Bank of Canada is to announce its benchmark interest rate; the announcement is to be accompanied by the bank’s rate statement, which contains insights into current economic conditions for the bank’s perspective.
Later in the day, the U.S. is to produce revised data on nonfarm productivity.
Thursday, September 6 2012
Australia is to publish official data on employment change and the unemployment rate, a leading indicator of economic health.
Bank of Japan Governor Masaaki Shirakawa is scheduled to speak in Tokyo; his comments will be closely watched for any indications of the possible future direction of monetary policy.
In the euro zone, the ECB is to announce its benchmark interest rate. The announcement is to be followed by a press conference with bank head Mario Draghi, which will be closely watched for details of the bank’s bond purchasing program.
Elsewhere, Germany is to release a report on factory orders, a leading indicator of production.
In the U.K., the Bank of England is to announce its benchmark interest rate.
The U.S. is to produce industry data on non-farm employment change, followed by weekly government data on unemployment claims. The country is also to release a report by the Institute for Supply Management on non-manufacturing activity, as well as government data on crude oil stockpiles.
Friday, September 7 2012
Australia is to release official data on trade balance, which is the difference in value between imported and exported goods and services.
In Europe, the Swiss National Bank is to publish a report on foreign currency reserves,
The U.K. is to produce official data on manufacturing production and producer price inflation, followed by a BoE report on consumer inflation expectations.
In the euro zone, Germany is to publish official data on industrial production, a leading indicator of economic health.
Later in the day, Canada is to release official data on building permits, a key gauge of future construction activity, as well as on employment change and the unemployment rate. The country is also to publish an official report on labor productivity, followed by a PMI report by the Richard Ivey School of Business.
The U.S. is to round up the week with closely watched official data on non-farm payrolls and the unemployment rate, as well as a report on average hourly earnings.
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