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22 May 2013
Flash: Bernanke testimony to overshadow FOMC minutes - BNZ
FXstreet.com (Barcelona) - Less than 16 hours away from Fed Bernanke testifying on the Economic Outlook and Monetary Policy before the Joint Economic Committee in Washington DC at 14:00 GMT, the EUR/USD is again above the 1.29 handle, last at 1.2917.
Mike Jones, Currency Strategist at BNZ, believes that “looking ahead, tonight’s testimony from Bernanke will be an important test of USD sentiment. It will certainly overshadow the FOMC minutes due to be released a few hours later,” Mike says.
According to the analyst, “the USD reaction to Bernanke largely depends on whether or not he will offer any firm guidance on the Fed’s QE exit strategy. A commitment to stay the QE course and no mention of tapering would be consistent with weakness in the USD. Alternatively, hints a tapering of asset purchases could begin as early as later this year would rejuvenate the USD rally. Under this scenario, the EUR/USD would likely re-test the recent lows around 1.2800, with USD/JPY pushing up to the 103 highs,” he concludes.
Mike Jones, Currency Strategist at BNZ, believes that “looking ahead, tonight’s testimony from Bernanke will be an important test of USD sentiment. It will certainly overshadow the FOMC minutes due to be released a few hours later,” Mike says.
According to the analyst, “the USD reaction to Bernanke largely depends on whether or not he will offer any firm guidance on the Fed’s QE exit strategy. A commitment to stay the QE course and no mention of tapering would be consistent with weakness in the USD. Alternatively, hints a tapering of asset purchases could begin as early as later this year would rejuvenate the USD rally. Under this scenario, the EUR/USD would likely re-test the recent lows around 1.2800, with USD/JPY pushing up to the 103 highs,” he concludes.