* Bernanke’s address in focus after only vague easing
signals
* Aussie supported by RBA’s signal to stand pat on rates
* Japanese exporters poised to sell dollar above 80 yen
By Lisa Twaronite
TOKYO, July 18 (Reuters) – The euro made limited gains
against the dollar on Wednesday after Federal Reserve Chairman
Ben Bernanke said the central bank is ready to support the U.S.
economy if needed, without being more specific.
More signals on the Fed chairman has in mind could come
later in the session, when he addresses the House Financial
Services Committee.
The euro seesawed overnight, initially dropping after
Bernanke’s testimony to the U.S. Senate Banking Committee
contained no explicit outline of stimulus steps. But the
European unit then rose to session highs, and continued to push
higher in Asian trade.
It was last at $1.2292, below Tuesday’s one-week high
of $1.2317 but well off a two-year low of $1.2162 hit last week.
Bernanke sounded a cautious tone, saying the Fed stands
ready to offer more stimulus as needed but stopped short of
signaling near-term action. He said the U.S. recovery is being
held back by Europe’s debt crisis and uncertainty surrounding
U.S. fiscal policy.
“It’s becoming really clear-cut that the U.S. economy has
slowed, admittedly on account of the euro zone, but the pace of
the slowdown is clearly frightening the Fed. It’s very clear
that more easing is coming, and that’s dollar-negative,” said
Andrew Wilkinson, chief economic strategist at Miller Tabak & Co
in New York.
In addition to a third round of large-scale bond purchases,
known as quantitative easing or QE3, some strategists have
suggested the Fed might follow the example of European Central
Bank, which lowered the interest paid to banks on their excess
reserves deposited with the central bank.
Wilkinson said said the Reserve Bank of Australia’s release
on Tuesday of minutes from its meeting in July gave good reason
to hold on the Austrialian dollar.
“The Aussie, on the other hand, the RBA minutes yesterday
suggested, ‘no, no, no,’ on further interest rate cuts, so
you’ve got a reason to hold the Aussie even in light of a
Chinese slowdown,” Wilkinson said.
The minutes showed that central bank refrained from cutting
interest rates at its July meeting after data showed the
domestic economy had more momentum than first thought
The Aussie hit a session high of $1.0325, just shy
of resistance at the July 5 high of $1.0330, and was last at
$1.0296.
It also rose to a record high against the euro of A$1.1884
overnight, but came off slightly to A$1.1930 as the
euro firmed against the greenback.
The euro rose off an overnight low of 78.27 pence versus
sterling, its lowest since November 2008. It was last
buying 78.49 pence.
Against the yen, the single currency edged up to 97.21
, off a six-week low of 96.17 yen touched on Monday.
The dollar bought 79.06 yen, moving away from a
one-month low of 78.68 yen hit on Monday but likely to face
pressure from selling by Japanese exporters on any move over the
80-yen level, with the July 5 high of 80.09 yen seen as a major
resistance point.
Investors shrugged off minutes of the Bank of Japan’s June
14-15 policy meeting released on Wednesday, at which some
members said Japanese sentiment could suffer if Europe’s debt
problems led to a rise in the yen.
