ForexLive US wrap: Bernanke lands the chopper

Bernanke: Unemployment falling faster than expected US GDP revised up to 3.0% in Q4 from earlier 2.8% reading Portuguese yields soar; investors concerned about different treatment for central banks ECB forced off sidelines to buy Portuguese debt, first purchases in two weeks Germany in no hurry to debate increasing European firewall: Official Chicago PMI rises to 64.0 in February from 60.2 in January Italian banks borrowed EUR 130 bln (25%) of the amount tendered at the LTRO--Reuters MPC's Weale: Interest rates may rise earlier than the market expects; may not be a case for further QE in May Fed's Beige Book: US growth increased at modest to moderate pace Gold falls $100 from peak to trough; hits $1689 Read the first bullet and that's pretty much all you need to know. The market has radically dialed back expectations that the Fed will launch QE3 and set about reprising risk accordingly. The dollar rallied across the board and metals took a historic drubbing. Gold fell 5% and silver 6%. EUR/USD fell as low as 1.3315 in late afternoon after rising to 1.3469 in anticipation of a typically dovish performance from the artist formerly known as the Bernank. The 100-day moving average at 1.3300 is next support for the single currency. Sellers are seen on rebounds to the 1.3390 and 1.3420/30 area. There was plenty of intraday volatility in the commodity currencies with AUD/JPY and CAD/JPY seen in huge demand at the month-ending 16:00 GMT fixing. Prices plunged later in the day as metals were thrashed. AUD fell 130 pips from just ahead of Bernanke to 1.0717 late in NY. GBP/JPY was also in demand, helping send EUR/GBP sliding and Cable soaring to the 1.5990 level before options protection ahead of 1.6000 capped the advance. Cable ends at 1.5915. USD/JPY was a moon shot after the less-dovish remarks from Bernanke. It reached session highs of 81.31 shortly before the NY close. supported by firmer bond yields and month-end JPY selling. This is the first close above 81.00 since early July.