Dollar weakens after Bernanke speech

AP News
Posted: Aug 26, 2011 4:07 PM
Dollar weakens after Bernanke speech

The dollar turned lower late Friday, erasing gains it made earlier after a speech by Federal Reserve Chairman Ben Bernanke.

The dollar initially rose Friday morning against other major currencies after Bernanke didn't offer any new plans to boost the economy. Bernanke, who spoke at an annual economics conference in Jackson Hole, did hint that Congress may need to act to stimulate hiring and growth.

But the dollar quickly retreated as investors began to interpret the speech to mean Bernanke will hold off on announcing any additional stimulus plans until September or November, said Kathy Lien, director of currency research at GFT.

In late trading, the euro rose to $1.4484 from $1.4368 late Thursday. It had fallen as low as $1.4328 in early trading. The British pound rose to $1.6335 from $1.6281.

Fears of another recession increased Friday after the U.S. said economic growth was slower than previously projected.

The Commerce Department said the U.S. economy grew at a 1 percent annual pace this spring, below the 1.3 percent pace previously estimated.

In other trading Friday, the dollar fell to 76.66 Japanese yen from 77.55 Japanese yen and it fell to 98.51 Canadian cents from 98.82 Canadian cents. It rose to 0.8078 Swiss franc from 0.7939 Swiss franc.

The dollar was mostly lower against other currencies around the world, including those in Australia, South Korea, Singapore and Latin America.