Session Recap: USD trims Bernanke-induced losses

FXstreet.com (Córdoba) - The USD corrected some of its Bernanke-induced losses during the European session, but remained under pressure across the board as markets digested Fed Chairman comments.

Fed Chairman Ben Bernanke stressed in a speech to economists that short-term interest rates will stay low, even if the unemployment rate falls below the 6.5% threshold. He said that US economy still needs "highly accommodative monetary policy ...in the foreseeable future". These comments were strongly dovish and smashed expectations the Fed could begin to taper its bond purchases as soon as September.

In the FX space, EUR/USD gained almost 3% to above 1.3200, the USD/JPY fell more than 2% to its lowest level this month at 98.26 and the AUD/USD rose above 0.9300. However, the greenback has managed to cut losses during the European session.

At time of writing, EUR/USD trades at 1.3070, USD/JPY was at 99.30, AUD/USD hovers around 0.9200 and GBP/USD quotes around 1.5120.

Main Headlines in Europe:

Germany: Wholesale Price Index falls by 0.4% in June

Flash: What can we do with the EUR/USD? – BTMU and Commerzbank

BoJ´s Kuroda sees moderate recovery of Japanese economy

ECB Monthly Report: Interest rates could be reduced further

Greece: Unemployment Rate at new high of 26.9%

Weidmann: ECB did not change strategy by providing forward guidance

EUR/USD: Bernanke’s Cat