Friday, 27 Aug 2010

Market Anxiously Awaiting Fed Chairman Speech, Prelim GDP Figure

The market has been fairly subdued in morning trading, as investors await Fed Chairman Bernanke's speech on the current state of the U.S. economy, set to be given at 14:00 GMT. EUR/USD has spent the majority of the day fluctuating between 1.2700 and 1.2730, while GBP/USD has been steady around the 1.5500 level.

Bernanke is expected to talk about the current state of the U.S. economic recovery. Should he indicate that the Federal Reserve is willing to intervene further to stabilize the economy, riskier currencies like the euro and U.K. pound may see some afternoon gains. On the other hand, any note of pessimism about the current state of the economic recovery will likely help the safe haven currencies like the USD and JPY.

In addition to today's speech, the U.S. is also releasing its Preliminary GDP figure for the 2nd quarter. Scheduled for 12:30 GMT, the figure is expected to show a marked decrease in Gross Domestic Product in the United States. If the figure comes in at or around the predicted level of 1.5%, traders can expect investors to abandon their riskier assets in favor of more stable currencies like the dollar and yen.