The euro bounced from a near nine-month low and rallied sharply against the dollar on Tuesday after Federal Reserve Chairman Ben Bernanke said the central bank is prepared to act further to help the economy. The move higher in the euro then fed on itself as investors who had bet against the single currency were forced to buy and cover short positions to prevent more losses.
The euro rose as high as $1.3301 on trading platform EBS. It last traded at $1.32661, up 0.7 percent on the day. The single currency fell to $1.3145 on electronic trading platform EBS, its weakest since January as a slide in stocks and a collapse in the shares of Franco-Belgian banking group Dexia - which has hefty exposure to Greek debt - prompted flight to the safety of the world's most liquid currency. The euro also fell to its lowest since at least 2004 on EBS at 100.77 yen before recovering to trade with a gain of 1 percent to 101.971. The dollar was last up 0.2 percent against the Swiss franc at 0.9236 Swiss francs on EBS after earlier touching a six month high. The greenback was 0.3 percent higher against the yen at 76.855 yen.
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