There are no surprises here as far as I can see. Chairman Bernanke has delivered the message most expected from him. Growth is slow. No further central bank action is needed at the moment. He reiterated the fact that the FED stands ready to provide help but once again stated he is not yet releasing any additional stimulus.
Many expected this speech would give clues for additional easing since in the past Bernanke has used this speech to let the markets know easing was on the horizon. And he did it again. Except this time, he let us know nothing is imminent but anything is possible if necessary.
Guest post by Matthew Lifson, Foreign Exchange Trader, Market Analyst of Cambridge Mercantile Group.
The DOW is moderately higher after release of the remarks and the EUR has eased off the 1.2600 handle it had gained earlier this morning. For those of you who had said that they would sell EUR ahead of the speech, you were all correct.
Now the markets will focus on next week’s ECB meeting on Thursday and the non-farm payroll and unemployment numbers on Friday.
Look for the EUR to ease lower throughout the rest of the day. I would be surprised it we trade as high as we have earlier this morning. I expect the EUR to settle around the 1.2550 area by the end of the day