The dollar is little changed in comparison to its major competitors at the start of the new trading week. Investors have been cautious as they await some upcoming speeches at the end of the week from some of the top central bankers.
Federal Reserve Chairman Ben Bernanke will give a speech at the Kansas City Federal Reserve Bank’s annual symposium in Jackson Hole, Wyoming on August 31. Investors will be watching for clues about what the Fed plans to do to bolster growth in the world’s largest economy. Hopes for a new round of stimulus from the Fed have increased, boosted by news of a letter Ben Bernanke sent to Rep. Darrell Issa of California, defending the Fed’s actions to support the economy. European Central Bank President Mario Draghi is also expected to give a speech on Saturday.
Bundesbank President Jens Weidmann has strongly criticized the proposed new round of bond purchases by the European Central Bank, saying that central bank financing could be “addictive like a drug.” In an interview to German magazine Der Spiegel, Weidmann said “for me, such a policy is too close to financing state debt by printing money.”
A report on Greece’s progress on economic reforms by the European Commission, European Central Bank and the International Monetary Fund or the troika will be delayed until early October, Germany’s Rheinische Post reported Monday.
Elsewhere, European Commission spokesman Simon O’Connor reportedly said that the troika will return to Athens in early September to begin the concluding phase of the review programme. It will take a couple of weeks, he said.
Meanwhile, in an interview to ARD public television on Sunday, German Chancellor Angela Merkel said “we all should weigh our words,” while commenting on the euro area debt crisis and the situation in Greece. Europe is in a “very critical stage” with regard to its fight against the crisis, she said, adding that Europe is not only a monetary union, but a political community.
When asked about the situation in Greece, she said Europe is awaiting a report from the troika. “Every day” counts for Greece to comply with its commitments and there is much more to be done.
The Greeks must demonstrate the credibility of their fiscal consolidation program and the commitment to implement the necessary reforms, French President Francois Hollande said after a meeting with Greek Prime Minister Antonis Samaras in Paris on Saturday.
While praising the people of Greece for going through the painful austerity measures for the past two and half years, Hollande reiterated that Greece will always remain in Eurozone. He said the European leadership is awaiting the troika report on Greece to make a decision on further aid to the country. There are commitments to be reaffirmed on both sides and the sooner these are done, the better, he added.
Dutch Prime Minister Mark Rutte has indicated that he would oppose another round of financial assistance to Greece reports said, citing a televised debate between leaders of the Netherlands’ main political parties.
“We have helped twice,” Rutte said during the debate, which was broadcast on RTL television on Sunday. He added that now Greece should adhere to the commitments to show that they want to stay in the euro.
The dollar reached a high of $1.2489 versus the Euro Monday morning, but has since eased back slightly, to around $1.2510.
A leading indicator of Eurozone’s economic activity remained unchanged in July, following three months of consecutive declines, a report from the Conference Board showed Monday. The leading economic index for the euro area was unchanged in July at 104.8. This followed decreases of 0.2 percent in June and 0.3 percent in May.
Germany’s business sentiment deteriorated for the fourth consecutive month in August as firms expressed greater pessimism about their future activity amid fears of recession in the 17-nation currency bloc, a closely watched survey revealed Monday.
The business climate index dropped more than expected to 102.3 in August, the lowest since March 2010, from a revised value of 103.2 in the previous month, the survey based on 7,000 executives by the Ifo Institute showed. The reading was forecast to ease to 102.8.
Germany’s import price inflation slowed for the tenth consecutive month in July, Destatis said Monday. Import price inflation fell unexpectedly to 1.2 percent in July from 1.3 percent in June. Economists were forecasting the rate to rise to 1.4 percent.
The greenback has reached a 3-day high of $1.5791 in comparison to the pound sterling Monday, up slightly from Friday’s high of $1.5801.
The buck reached a 3-day high of Y78.834 versus the Japanese Yen Monday morning, but has since pulled back to around Y78.685.