The U.S. dollar rose in afternoon trading while stocks fell on fears that Federal Reserve Chairman Ben Bernanke will not signal new plans to stimulate the economy in a highly anticipated speech Friday in Jackson Hole, Wyoming.
After three days of gains, U.S. stocks dropped as investors shied away from risky trades ahead of Bernanke's address to the Kansas City Fed's annual conference at Jackson Hole, Reuters reports. The dollar, a safe-haven currency, tends to rise when investors are jittery.
Investors were also rattled by unsubstantiated rumors that Germany's AAA credit rating may be downgraded, CNNMoney says.
Reuters reports that the dollar rose 0.6 percent to 77.39 yen. The dollar also hit a one-week high against the Swiss franc of 0.79898 franc before reversing slightly to 0.7970.
Markets began the week on expectations that Bernanke could hint at a third round of Fed easing. But investor expectations of a QE3 are fading.
Bernanke's 2010 address at Jackson Hole became famous as the speech that launched QE2, though the program wasn't enacted until later in the year, Forbes notes. After his speech at the same conference last year, the dollar dropped sharply, according to the Associated Press.
Many economists doubt that Bernanke will signal any new stimulus measures Friday, CNNMoney says.
With an economic situation that is significantly different from that of 2010, "anybody expecting a message that sharply changes the current setting of monetary policy is likely to be disappointed," the Financial Times says.