Jamaican Dollar is susceptible due to Quantitative easing possibility

Jamaican Dollar is susceptible due to Quantitative easing possibility

The dollar has weakened against 13 of its 16 major peers after reports showed that U.S inflation suffered its heaviest decline in three years, raising fears that the Federal Reserve will implement more steps to boost the flagging recovery.

“There’s nothing about the U.S. data that makes you want to own the dollar,” said Kit Juckes, head of foreign-exchange research at Societe Generale SA in London. “You’ve got an economy that’s growing slowly, an inflation rate that’s going to come lower, and a central bank with an itchy trigger finger to give us more quantitative easing.” The dollar fell 0.3% to 79.22yen and 0.1% against the Euro to .256.

This morning’s report also showed that the US economy’s recovery may be stalling at a faster rate than observers initially feared. Claims for jobless benefits jumped by 6,000 more than predicted to 386,000 in the week ending June 9th. Economists had predicted that the figure would fall to 375,000.

Fed Chairman Ben Bernanke said; “The situation in Europe poses significant risks to the U.S. financial system and economy and must be monitored closely. As always, the Federal Reserve remains prepared to take action as needed to protect the U.S. financial system and economy in the event that financial stresses escalate.”

The Euro’s advance against the greenback was slowed after the credit ratings agency Moody’s slashed the credit ratings of Spain and Cyprus raising the fears of contagion in the Eurozone.

“The dollar is susceptible to weakening because expectations for additional easing are rising ahead of the policy meeting next week,” said Marito Ueda, a senior managing director in Tokyo “A decline in employment and the economy is the biggest concern for the Fed.”

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