Dollar steady after Bernanke speech
The Australian dollar is virtually unchanged following a muted reaction to a closely watched public appearance by US Federal Reserve chairman Ben Bernanke.
At midday, the currency was trading at 105.58 US cents, up slightly from 105.56 US cents on Monday afternoon.
Easy Forex senior currency dealer Francisco Solar said the currency traded in a tight range both before and after the public question and answer session with Dr Bernanke on Tuesday morning (AEDT).
‘‘There has been nothing really to warrant a move higher or lower, so it’s been holding in the high 105 (US cent) area,’’ he said.
‘‘Dr Bernanke’s speech didn’t really move the markets. It was pretty much the same rhetoric.’’
Since 7am AEDT, the Australian dollar has traded between 105.56 US cents and 105.70 US cents.But Mr Solar said Dr Bernanke’s assertion the Fed wouldn’t want to ‘‘raise interest rates prematurely’’ had weakened the US dollar slightly.
There has been growing speculation the Fed will wind back its stimulus programs sooner than previously expected after the minutes from its most recent meeting showed some policymakers believed its bond-purchasing program could be scrapped in 2013.
Mr Solar said the Australian dollar was likely to remain in a narrow range on Tuesday but would be driven by events in the US over the next few days, ahead of the release of key domestic employment figures for December on Thursday.Meanwhile, Australian bond futures prices were slightly higher at noon.
At midday, the March 10-year bond futures contract was trading at 96.565 (implying a yield of 3.435 per cent), up from Monday’s local close of 96.560 (3.440 per cent).
The March three-year bond futures contract was at 97.170 (2.830 per cent), up from 97.160 (2.840 per cent) previously.