Dollar nurses losses as QE takes centerstage again

By Charlotte Cooper

TOKYO (BestGrowthStock) – The dollar sat at its lowest levels for a couple of weeks on Monday, nursing large losses from weaker than expected employment data and renewed focus on U.S. quantitative easing.

Federal Reserve Chairman Ben Bernanke was reported in an interview with CBS television as not ruling out further bond purchases beyond the $600 billion already announced, helping take the dollar to its lowest in three weeks against the yen on Friday, and two weeks against the euro.

“The market is going to continue to view U.S. quantitative easing as being a driving force,” said Greg Gibbs, FX strategist at RBS in Sydney.

Bernanke appears on CBS’s “60 Minutes” show at 0000 GMT and Gibbs said the suggestion he would say he was prepared to do more was keeping the dollar on the back foot.

The dollar was trading at 82.71 yen, up 0.2 percent from late U.S. trade and just above Friday’s three-week low of 82.52 yen. It lost 1.5 percent against the yen on Friday.

The euro was holding just below a two-week high of $1.3438, having risen 1.5 percent on Friday.

Data on Friday showed the U.S. economy added fewer jobs than expected in November, driving the jobless rate up to 9.8 percent.

At the same time, European Central Bank purchases of Irish and Portuguese debt last week also helped support the euro.

The dollar index (Read more about the global trade. ), a gauge of its performance against six major currencies, was hovering just above a two-week low of 79.063 set on Friday (.DXY: ).

Expectation that U.S. quantitative easing will be around for a while yet encouraged investors to buy into higher yielding currencies, lifting both the Australian and New Zealand dollars.

The Aussie, which surged 1.7 percent to $0.9938 on Friday, was holding steady at $0.9912 in early trade.

(Editing by Joseph Radford)

Dollar nurses losses as QE takes centerstage again