Yesterday, the US market continued to witness a further deterioration.
The USD fell again, setting a fresh record low mainly against the EUR and the CAD. Growing concerns about the US economy and the possibility of further interest rate cuts by the Federal Reserve are the main reasons behind the US dollar’s continuous weakness. The USD is trading around the 1.4095 level against the EUR.
Yesterday, trader’s attention was focused primarily on the Fed Chairman’s Bernanke Speech in front of the U.S Congress. Bernanke told Congress that the credit crisis has created a “significant market stress”, but reassured that regulators would take steps to curb fallout due to the mortgage crisis.
Fed Chairman’s Speech came just two days after the Federal Reserve cut a key interest rate by 0.5% in order to prevent the weight of housing and credit problems from sinking the economy.
The Greenback weakness continues to dominate financial markets as last day’s headline figures showed little signs of hope. One of the few positive US economic indicators seen through recent trade was yesterday’s Philadelphia Fed manufacturing report that showed a slightly more optimistic picture of regional industrial production. The headline figure released at 10.9, far above consensus estimates of 3.0, for the month of September.
There is no significant economic news expected to come out of the U.S today, apart from the Fed Governor’s Mishkin and Fed Governor’s Kohn speeches on monetary policy in Frankfurt.