Posted On: August 27, 2012
The U.S. dollar dropped in value against the euro during trading on Monday, as traders took a cautious approach to investing just days before two major speeches from leaders of the respective central banks.
The Wall Street Journal reports
that Federal Reserve Chairman Ben Bernanke and European Central Bank chief Mario Draghi are scheduled to discuss potential stimulus measures, and many investors stayed on the sidelines before the announcements.
However, some have argued that the speeches may detail long-term plans but no specific action, based on a previous move made by Bernanke.
"Contrary to common wisdom, Bernanke did not hint at QE2 during his Jackson Hole 2010 speech. Instead he simply outlined the available options and spoke about each in terms of costs and benefits. We expect something similar this time around," Elsa Lignos, a currency strategist at Royal Bank of Canada, told the news outlet.
that additional QE is often seen as potentially negative for a currency, and despite many calls in Europe for such action German Bundesbank President Jens Weidmann noted this continued intervention could prove "addictive, like a drug."
Category: Industry News
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