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Forex - Aussie up as Stevens testifies to parliament on economy

ForexFeb 11, 2016 06:52PM ET
 
Aussie up with Stevens testifying

Investing.com - The Australian dollar gained in early Asia on Friday with the central bank chief testifying before parliament on the economic outlook.

AUD/USD traded at 0.7127, up 0.27%, while USD/JPY changed hands at 112.58, up 0.13%.

Ahead, Australia reports home loans for December, seen up 3.0% month-on-month and housing finance data.

The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, eased 0.22% to 95.64.

Earlier, Reserve Bank of Australia Governor Glenn Stevens said the central bank is assessing global and local data to determine where recent global market volatility and damp commodity prices are taking the economy.

"We will be examining new information over the months ahead as we try to discern the answers to these and other questions," Stevens said in a statement before the House of Representatives Standing Committee on Economics.

"With inflation unlikely to cause a problem by being too high over the next year or two the statement after the recent meeting indicted that the board retains the flexibility to ease further should that be helpful," Stevens said. It will take time to see if recent financial turbulence will have a materially negative effect on aggregate demand at home and overseas, Stevens said.

"The more recent anxiety is probably best described as greater uncertainty over the intentions of Chinese policymakers and over whether they will be able to carry off the economic transition China needs. This anxiety has been reflected in capital flows," he said.

Overnight, the dollar extended losses against the other major currencies on Thursday, as Federal Reserve Chair Janet Yellen reaffirmed comments made on Wednesday, sparking uncertainty over the timing of future rate hikes.

Yellen repeated to the Senate Banking Committee on Thursday that the U.S. economy is recovering while acknowledging that a weakened global economy and drop in U.S. equity markets is tightening financial conditions faster than the Fed wants.

In testimony before a congressional committee on Wednesday, Yellen said there are good reasons to believe the U.S. will stay on a path of moderate growth that will allow the Fed to pursue "gradual" adjustments to monetary policy.

The dollar had mildly strengthened earlier, after the U.S. Department of Labor said the number of individuals filing for initial jobless benefits in the week ending February 6 decreased by 16,000 to 269,000 from the previous week’s total of 285,000.

Analysts expected jobless claims to fall by 4,000 to 281,000 last week.

Forex - Aussie up as Stevens testifies to parliament on economy
 

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