Page last updated at 21:57 GMT, Friday, 9 October 2009 22:57 UK

Dollar rises on Bernanke comments

US Federal Reserve chairman Ben Bernanke
Mr Bernanke's comments have given the dollar a welcome boost

The dollar has rebounded from recent lows after US Federal Reserve boss Ben Bernanke said he would tighten monetary policy when the economy recovers.

The comments eased concerns about the inflationary impact of US interest rates remaining at the current level of between 0% and 0.25%.

Higher rates would also make the dollar more attractive to investors.

Mr Bernanke's comments saw the dollar rise against the yen, and also gain against the euro and the pound.

The pound was down 1.4% against the dollar at $1.5870 , while the euro had fallen 0.7% to $1.4705, and one dollar was worth 89.76 yen.

'Prevent inflation'

"Accommodative [fiscal] policies will likely be warranted for an extended period," Mr Bernanke said in a press conference at the Fed's Washington headquarters.

"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."

US economic data continues to point to a slow and patchy recovery in the world's largest economy.

While a report last week showed that US firms cut more jobs than expected in September, figures this week detailed a rise in retail sales, and unemployment claims falling to a nine-month low.



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