Reuters: US Dollar Report: FOREX-Dollar falls versus euro, yen after Bernanke

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FOREX-Dollar falls versus euro, yen after Bernanke Aug 31st 2012, 15:01 Tweet Share this Email Print Fri Aug 31, 2012 11:01am EDT * Dollar hits three-month low vs basket of currencies * Bernanke: Fed to act as needed, labor market a 'grave' concern By Wanfeng Zhou NEW YORK, Aug 31 (Reuters) - The dollar fell to a three-month low against major currencies o n F riday after Federal Reserve Chairman Ben Bernanke said the stagnation of the U.S. labor market is "a grave concern" and that the central bank would act as needed to strengthen the economic recovery. Bernanke, speaking at the Kansas City Fed's annual symposium In Jackson Hole, Wyoming, however, did not explicitly signal an imminent move. The dollar briefly pared losses against the euro and yen immediately after Bernanke spoke as he disappointed some investors who had hoped for an imminent move, before resuming declines to hit session lows. The Federal Open Market Committee, the Fed's policy-setting panel, next meets on Sept. 12-13. Many analysts expect the Fed to announce a third round of quantitative easing in September. "Bernanke's comments are close to what he has been saying over the past several months. The only thing that sticks out is that the 'grave' concern about the labor market, which is a little stronger than the language used in the past," said Win Thin, global head of emerging market strategy at Brown Brother Harriman in New York. "That will make next week's payrolls report even more important." The August payrolls report is due next Friday. The euro last traded at $1.2595, up 0.7 percent on the day and compared with $1.26 before Bernanke's comments. It had risen as high as $1.2636 on Reuters data, the strongest since early July. The dollar briefly recovered to 78.54 yen after Bernanke's comments, compared with 78.36 yen earlier. It then fell to a session trough of 78.18 yen and was last at 78.29, down 0.4 percent on the day. The dollar index, which measures the dollar's value against a basket of currencies, fell 0.6 percent to 81.192, having hit a more than three-month low of 80.964. "Chairman Bernanke and the Fed have kept the markets aloft for two FOMC meetings by hinting at quantitative easing. That policy continued in Jackson Hole today. The sleight of hand will last only until September 13th," said Joseph Trevisani, chief market strategist at Worldwide Markets in Woodcliff Lake, New Jersey. Tweet this Link this Share this Digg this Email Reprints Comments (0) Be the first to comment on reuters.com. Add yours using the box above.

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