Ben Bernanke will be speaking at the Atlanta Fed’s Financial Markets Conference in about an hour’s time and the market will be hanging on his every word for any signs of further bond buying. I’m no expert on Ben’s ways, but central bankers usually don’t change their words and tone based on one set of jobs data, so I expect Mr Bernanke to remain very non-commital.
If he does give some hint of further QE, then this will probably show itself in the Asian FX market through a higher AUD/USD, which would contain both the bearish USD and risk-on sentiments. I’ve been of the opinion in recent days that the market has been getting itself overly bearish of AUD/USD at the wrong levels, and we may see a short-covering spike back onto the 1.0400 handle.
