NEW YORK (Forex News Now) – In what could provide plenty of grist for the market rumor mill – as well as key indicators for traders eyeing a move on the dollar – Federal Reserve Chairman Ben Bernanke is set to deliver an address at the European Banking Conference held in Frankfurt, Germany.
The speech is scheduled for 5:15 AM EST.
The Fed chairman’s words are perhaps more closely followed now than in recent months due to the previous announcement of a quantitative easing program worth approximately $600 billion, designed to stimulate the American economy. Bernanke and the Fed in general have both drawn considerable fire from the international community in response to the move, which will certainly be addressed by Bernanke in the speech.
The agenda for the meeting states that Bernanke will serve on a policy panel entitled “Emerging from the crisis: Where do we stand?”, joined by Dominique Strauss-Kahn, managing director of the IMF, and Jean Claude Trichet, president of the European Central Bank.
He is expected to address the recently-concluded G20 Summit in South Korea and the current health of central banks across the globe, and will more than likely address QE2.
Bernanke has repeatedly defended the purchase program, stating that the program will encourage investment in business and could result in the creation of as many as 700,000 jobs over the next 24 months. Critics in the global community, though, have viewed the move as a way to devalue the American dollar and send excessive amounts of liquidity into the market – a view held by Henrique Meirelles, the governor of the Central Bank of Brazil and another panelist.
Bernanke has also had to contend with lawmakers and their constituents who have been calling recently for the Federal Reserve to be stripped of its dual mandate to promote stable inflation and ensure maximum employment. Such a move would weaken the Federal Reserve’s ability to impact the economy, but would, according to Republican senators, keep the Fed from usurping fiscal authority from Congress, as well as prevent measures such as QE2 that devalue the dollar.
It is unclear whether or not Bernanke will speak to this issue at the conference, but regardless, the machinations of the Federal Reserve will surely be a featured topic during the panel session.
The dollar is down against both the euro and pound ahead of forex trading news from the speech and panel session.