Dollar rises against most major currencies
- Source: xinhua
- [08:55 October 10 2009]
- Comments
The dollar rebounded against most major currencies on Friday after US Federal Reserve Chairman Ben Bernanke said that monetary policy would be tightened when US economic recovery looked on a firm footing.
"When the economic outlook has improved sufficiently, we will be prepared to tighten the stance of monetary policy," he said late on Thursday on a Fed meeting. Bernanke said policymakers of the central bank believe that accommodative policies will likely be warranted for "an extended period".
"At some point, however, as economic recovery takes hold, we will need to tighten monetary policy to prevent the emergence of an inflation problem down the road," Bernanke said.
Bernanke's comments drove the dollar higher in Friday trading. The greenback fell in previous sessions as the Fed is expected to keep rates lower than other nations.
The dollar also gained some strength from a report showed that US trade deficit narrowed unexpectedly. The US Commerce Department reported on Friday that US trade gap contracted to 30.7 billion dollars in August from 31.9 billion dollars in July. August exports rose 0.2 percent while imports fell 0.6 percent, driven by a sharp fall of oil imports.
Analysts of Global Insight said imports will pick up more than exports in the second half of the year, as the domestic inventory cycle turns. It will lead to a gradually widening trade deficit.
The euro bought 1.4709 dollars in late New York trading compared with 1.4778 dollars it bought late Thursday. The pound fell to 1.5835 dollars from 1.6067 dollars.
The dollar fell to 1.0441 Canadian dollars from 1.0516 Canadian dollars, and rose to 1.0322 Swiss francs from 1.0272 Swiss francs. It rose to 89.84 Japanese yen from 88.52 Japanese yen.
