EUR/USD Performance Chart as at 7:00 p.m. Singapore time, 28/04/11

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HISTORICAL DETAILS 

% Change

1 Wk 1.95%

1 Month 5.12%

3 Months 9.00%

6 Months 6.50%

1 Year 12.61%

 

52 WEEK

High 1.4882

Low 1.1877

 

BLOOMBERG MEDIAN FORECASTS

Q2 2011 1.42

Q3 2011 1.39

Q4 2011 1.38

Q1 2011 1.35

 

DAILY DETAIL

The euro rallied 0.49% to $1.4853 against the US dollar this morning, after the Federal Reserve kept interest rates unchanged at a record low yesterday and Fed Chairman Ben Bernanke reiterated his vow to keep interest rates low for an ‘extended period’. The dollar immediately fell following the announcement, as the market was expecting Mr Bernanke to signal the possibility of an interest-rate increase by dropping the words ‘extended period’ from the sentence. ‘Extended period suggests it would be a couple meetings, probably, before action,’ the Fed Chairman told a journalist at a news conference following the monetary policy decision. ‘Unfortunately, the reason we use this vaguer terminology is that we don’t know with certainty how quickly response will be required.’ Mr Bernanke also said he did not know ‘exactly how long it will be before a tightening process begins’. [1] Mr Bernanke said the $600 billion QE2 package will end in June, as planned. However, estimates for US GDP growth were lowered to 3.1%-3.3% from 3.4%-3.9%, suggesting US interest rates are likely to remain at historic lows for a while longer than initially anticipated. Barring any unforeseen events, this is likely to continue stimulating demand for risky (higher yielding) assets. In Europe meanwhile, Banco Santander said it sees bad debts near their peak in Spain while ECB’s Mersch today told reporters that the ECB is ‘committed to a gradual exit’ from non-standard measures. The comments suggest the ECB will continue to tighten monetary policy. Separate data showed Germany’s seasonally-adjusted unemployment rate falling more than expected to 2.97 million in March. The adjusted jobless rate fell to 6.3% from 6.4% in February, while job vacancies for April climbed by 13,000 following a 9000 increase in March. Anthony Grech, London

 

Sources: [1][2] Bloomberg News (27 April 2011). Chart data supplied by Bloomberg.