The dollar declines vs. the euro, but climbed against the yen after Bernanke's speech on the economy and the US preparedness.
The U.S. dollar fell slightly against the euro Friday, but has accelerated its climb against the yen after a very carefully worded speech by the chairman of the U.S. Federal Reserve (FED) Ben Bernanke, who excluded any new measures to support the economy immediately. At about 4PM Eastern Time on Friday the euro vs dollar grew at 1.2751 dollars from 1.2720.
The euro also continued its rise against the Japanese currency to 108.65 yen from 107.36 yen the day before.
Dollar grew against Yen after Bernanke's speech
The dollar, meanwhile, added to its gains against the yen at 85.19 yen from Thursday night's 84.37. This hapened after the speech of the Fed chief on the current economic health. The speech was highly anticipated as the markets are dominated by concerns a possible relapse into another recession.
Bernanke said the U.S. economic recovery was "far from complete," but that the recovery continued , "at a relatively slow pace" and is expected to accelerate slightly in 2011. Yet, Bernanke said there is no reason for the Central Bank to intervene at this moment. However, he ensured that the Fed will be ready to intervene if necessary.
Bernanke's words show that the investors should not expect the Fed to act soon. The markets took Bernanke's words as a relief for the fact that he does not feel compelled to act immediately. In the meantime the speech has overshadowed the Friday's economic indicators, including the publication of a downward revision of U.S. GDP growth in the second quarter to 1.6% annual rate.
Around 21:00 GMT, the Swiss franc retreated sharply against the euro compared to the previous evening. The British pound dropped against the euro and against the greenback as well, despite the upward revision of second quarter growth in the United Kingdom. The Chinese currency finished at 6.7980 yuan to vs one dollar, compared to Thursday's 6.7996.
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