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90 seconds at 9 am: NZ$ up to 82.3 USc as US$ weakens after Fed's Bernanke signals extended very low interest rates to boost US economy; Europe eyes bigger debt firewall
Here's my summary of the key news overnight in 90 seconds at 9 am, includings news the New Zealand dollar rose to over 82.3 USc overnight after US Federal Reserve Chairman Ben Bernanke signalled an extended period of accomodative monetary policy to try to lift a US economy that has yet to enter a self-sustaining recovery.
Bernanke said the employment market had improved, but was still not normal and continued easing was required.
He has previously pledged to keep official interest rates at near 0% until late 2014, which would mean US official interest rates had been on hold at nearly 0% for six years.
He made no specific comment about a third round of quantitative easing (QE III), but stock markets and currency markets took the comments to mean the option was still open and Bernanke remained dovish on monetary policy. See more here at Reuters.
This weakened the US dollar against many currencies, including the New Zealand and Australian dollars, given more money printing would devalue the world's reserve currency.
US stocks were up more than 1% in late trade on renewed hope for more stimulative monetary policy. See more here at Bloomberg.
Elsewhere, European stocks rose 1% after better than expected German business confidence data and after Germany signalled it was willing to consider a bigger debt bailout firewall for struggling Eurozone governments. See more from Bloomberg.
This follows rising concern about Spain's economic and budget deficit position. Its long term bond yields have remained elevated in recent weeks despite the European Central Bank's mass money dumps of the last three months. See more here at Reuters.