Dollar falls against euro after Bernanke comments

AP News
Posted: Mar 26, 2012 3:31 PM
Dollar falls against euro after Bernanke comments

The dollar fell sharply against the euro Monday after Federal Reserve Chairman Ben Bernanke said that the U.S. job market is still weak despite recent signs that it is improving.

Traders interpreted Bernanke's comments to mean that the Fed will keep interest rates near zero. Lower interest rates tend to weigh on a currency by reducing the returns investors get from holding it.

Bernanke's comments were made during a speech at the National Association for Business Economics.

The euro rose to $1.3343 in late trading from $1.3263 late Friday.

The central bank has kept interest rates near zero since cutting them during the financial crisis in December 2008. The Fed keeps rates low in order to help the economy recover.

Despite improvements in the job market, Bernanke said that he doesn't expect the unemployment rate to keep falling. Employers added an average of 245,000 jobs a month from December through February. And the unemployment rate was at 8.3 percent in February, down from 9 percent during the same month a year ago.

In other trading, the British pound rose to $1.5953 from $1.5871. The dollar fell to 0.9038 Swiss franc from 0.9086 Swiss franc and to 99.24 Canadian cents from 99.85 Canadian cents.

The dollar rose to 82.82 Japanese yen from 82.49 yen.