Forexpros รข€“ The euro eased off the strong gains made against the dollar on Tuesday after U.S. Federal Reserve Chairman Ben Bernanke hinted that monetary easing may be needed to stimulate the economy, as the labor market remains unacceptably weak.
In Asian trading on Tuesday, EUR/USD hit 1.3353, down 0.04%, up from a session low of 1.3352 and off from a high of 1.3359.
The pair was likely to find support at 1.3192, Monday's low and resistance at 1.3368, Monday's high.
The Federal Reserve broke its silence over whether the U.S. economy may need extraordinary easing measures to promote price stability and more employment when Ben Bernanke hinted that such measures could help the U.S. labor market, which he described as "far from normal," despite recent improvements to headline unemployment rates.
Falling unemployment rates likely reflect a scenario in which companies that fired too many people during the recession are refilling some of those spots today, although the demand for new hires for new business ventures remains soft.
Monetary easing, meanwhile, might help.
"Further significant improvements in the unemployment rate will likely require a more-rapid expansion of production and demand from consumers and businesses, a process that can be supported by continued accommodative policies," Bernanke told the National Association for Business Economics Annual Conference, Washington, D.C., according to a copy of his speech.
More weak housing data hit the wire in the U.S. as well.
The National Association of Realtors reported that its pending home sales index fell by 0.5% in February, much weaker than expectations for a 1.0% gain.
Pending home sales rose by 2.0% in January.
Similar housing indicators have disappointed for February in recent days.
The increasing likelihood for easing measures sent the dollar tumbling and U.S. stocks spiking, as easing tends to involve a central bank injecting hefty doses of liquidity into the economy to juice it back to more robust activity.
Europe, meanwhile, saw some positive news, with the euro gaining when the Ifo Institute said its index of German business confidence inched up to 109.8 from a reading of 109.6 in February.
Analysts had expected the index to hit 109.7 this month.
The news sent the euro firming against a weakening dollar although the greenback regained its composure early in the Asian session on Tuesday.
The euro didn't sail through the session without headwinds.
Italian Prime Minister Mario Monti has warned that contagion from Spain could rekindle the eurozone debt crisis, which has abated as of late now that European policy makers have made rescue funding available to Greece.
The euro, meanwhile, was up against the pound and up against the yen, with EUR/GBP trading up 0.06% at 0.8369 and EUR/JPY up 0.13% at 110.79.
Later Tuesday, Fed Chairman is due to appear in public again, as is Federal Reserve Bank of Dallas President Richard Fisher.
More housing data is due out, with the S&P/Case-Shiller House Price Index scheduled for release.
Markets will also keep a sharp eye on the U.S. Conference Board's consumer confidence index.
In Europe, meanwhile, the Gfk German Consumer Climate Index will shed some light on the mood in the eurozone's largest economy.
In Asian trading on Tuesday, EUR/USD hit 1.3353, down 0.04%, up from a session low of 1.3352 and off from a high of 1.3359.
The pair was likely to find support at 1.3192, Monday's low and resistance at 1.3368, Monday's high.
The Federal Reserve broke its silence over whether the U.S. economy may need extraordinary easing measures to promote price stability and more employment when Ben Bernanke hinted that such measures could help the U.S. labor market, which he described as "far from normal," despite recent improvements to headline unemployment rates.
Falling unemployment rates likely reflect a scenario in which companies that fired too many people during the recession are refilling some of those spots today, although the demand for new hires for new business ventures remains soft.
Monetary easing, meanwhile, might help.
"Further significant improvements in the unemployment rate will likely require a more-rapid expansion of production and demand from consumers and businesses, a process that can be supported by continued accommodative policies," Bernanke told the National Association for Business Economics Annual Conference, Washington, D.C., according to a copy of his speech.
More weak housing data hit the wire in the U.S. as well.
The National Association of Realtors reported that its pending home sales index fell by 0.5% in February, much weaker than expectations for a 1.0% gain.
Pending home sales rose by 2.0% in January.
Similar housing indicators have disappointed for February in recent days.
The increasing likelihood for easing measures sent the dollar tumbling and U.S. stocks spiking, as easing tends to involve a central bank injecting hefty doses of liquidity into the economy to juice it back to more robust activity.
Europe, meanwhile, saw some positive news, with the euro gaining when the Ifo Institute said its index of German business confidence inched up to 109.8 from a reading of 109.6 in February.
Analysts had expected the index to hit 109.7 this month.
The news sent the euro firming against a weakening dollar although the greenback regained its composure early in the Asian session on Tuesday.
The euro didn't sail through the session without headwinds.
Italian Prime Minister Mario Monti has warned that contagion from Spain could rekindle the eurozone debt crisis, which has abated as of late now that European policy makers have made rescue funding available to Greece.
The euro, meanwhile, was up against the pound and up against the yen, with EUR/GBP trading up 0.06% at 0.8369 and EUR/JPY up 0.13% at 110.79.
Later Tuesday, Fed Chairman is due to appear in public again, as is Federal Reserve Bank of Dallas President Richard Fisher.
More housing data is due out, with the S&P/Case-Shiller House Price Index scheduled for release.
Markets will also keep a sharp eye on the U.S. Conference Board's consumer confidence index.
In Europe, meanwhile, the Gfk German Consumer Climate Index will shed some light on the mood in the eurozone's largest economy.
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