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Waiting to hear from Bernanke

Waiting to hear from Bernanke

The euro is hovering against the dollar as the market grew nervous whether the U.S. Federal Reserve chief will indicate the possibility of imminent monetary stimulus later in the day. Currency moves were limited as investors were reluctant to place bets ahead of key events, which also include a European Central Bank policy meeting, U.S. August jobs report and Fed policy meeting.

Meanwhile ECB chief Mario Draghi was reported to have said the European Central Bank needed to take “exceptional measures,” to fight the debt crisis, increasing hopes that the ECB will go ahead with a bond buying programme to reduce borrowing costs in several Eurozone countries.

Britain’s business community is urging the government to accelerate plans to boost growth after its own forecasts predicted that the UK economy will shrink this year. The CBI warned in its quarterly outlook that unemployment would continue to rise until the middle of 2013 after it downgraded growth this year from 0.6% to -0.3%. Without the expected lift in high street spending from the diamond jubilee and the Olympics, the CBI said that declining exports and the ongoing euro crisis would take their toll on GDP growth.

The key event for today will be Ben Bernanke’s closely watched speech at Jackson Hole. This afternoon he is expected to discuss the range of US policy options to tackle the current malaise of slow growth and high indebtedness.

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