The dollar rose against the euro and yen on Wednesday after analysts said the US Federal Reserve chairman hinted the bank was in no rush to expand its balance sheet on the same day data painted a brighter picture of the US economy.
The euro accelerated losses against the dollar to hit a near one-eek low and the greenback rose sharply against the yen after the Fed's Ben Bernanke told a congressional panel the country's unemployment rate had fallen faster than expected.
Bernanke struck a less dovish tone than in the past, analysts said, suggesting a third round of quantitative easing was unlikely in the near future. "It's all about the balance sheet," said Kathy Lien, director of FX research at GFT in Jersey City. "They intend to keep the US balance sheet unchanged for the time being."
The euro fell to as low as $1.3343, more recently trading down 0.83 percent to $1.3357. The greenback also firmed against the yen, up 0.83 percent to 81.10 yen after having risen as high as 81.22 yen. The ECB's lending helped riskier currencies earlier in the day, lifting the Australian dollar to a 7-month high against the US dollar, the New Zealand dollar to a 6-month high and the Canadian dollar a five-month peak. The euro was still up about 2.2 percent against the dollar for the month, reflecting hopes the region's sovereign debt crisis could be headed closer to resolution.
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