Euro fell against the dollar in the Asian session to erase gains made yesterday. Risk was off again after comments by Federal Reserve Chairman Ben Bernanke disappointed. He refrained from signalling immediate steps the U.S. central bank might take to spur growth in the world's largest economy.
Before Bernanke's comments , market sentiment was high yesterday as the central bank of China announced its first interest-rate cut since 2008 to spur growth. EURUSD opened in Asia at 1.2560 and fell to a low of 1.2512. Focus turns to data due later from Germany, which forecasts says exports fell in April. This would be negative for euro, says Trading Point.
Although Mr. Bernanke said the Fed was prepared to take action to boost the U.S. economy if needed, he stopped short of signaling further easing at the June 19-20 Federal Open Market Committee, saying Fed officials "are still working" on assessing the outlook and deciding whether to act.
"There were some hopes of policy action being taken, but nothing specific came out, disappointing some market participants," said Minori Uchida, chief analyst at the Bank of Tokyo-Mitsubishi UFJ.
"And risk-aversion is gradually taking hold as equities slide somewhat lower," he said, according to Wall Street Journal.
Japan's Nikkei 225 index fell 2 per cent in afternoon trading, while Hong Kong's Hang Seng was down 0.4 per cent and Australia's S&P/ASX 200 index declined 1.1 per cent.
Markets are waiting on a slew of Chinese data this weekend, including inflation and manufacturing figures, which are expected to indicate the world's second-biggest economy is slowing.
The People's Bank of China cut one-year lending rates a quarter-point to 6.31 per cent and its one-year deposit rate to 3.25 per cent on Friday.
The International Monetary Fund on Friday said New Zealand's dollar needs to be 15 per cent weaker to be at a level that would sustain the nation's current account deficit at 2009 levels, informs Ninemsn.