July 11: Asian session
USD plummeted versus all major counterparts as the yesterday’s FOMC meeting minutes and Ben Bernanke’s words have put the highly anticipated QE tapering under question. According to Bernanke, the unemployment rate understates weakness in employment market. “Highly accommodative monetary policy for the foreseeable future is what’s needed in the U.S. economy”, he said.
As a result, EUR/USD surged by 400 pips in two days, touching $1.3205. As of writing the pair edged lower below $1.3100. GBP/USD jumped from $1.4900 to $1.5190 before returning to $1.5110. USD/CAD dropped to $1.0350. USD/CHF fell to 0.9400 before returning to 0.9480.
AUD/USD strengthened to $0.9310. Australia released contradictory employment data: employment rose by +10.3K (vs. expected flat at 0.0), while unemployment rate increased to 5.7% (vs. expected 5.6%). NZD/USD rose to $0.7970.
USD/JPY fell by 300 pips in two days, touching 98.20. The pair has recovered to 98.90 as of writing. Bank of Japan left its monetary policy unchanged on today’s meeting, but upgraded the assessment of its economy.