NEW YORK CITY: The US dollar pushed higher against the euro even as bond yields fell Wednesday after the Fed's Ben Bernanke said interest rates would stay low even if stimulus is trimmed.
Fed chief Ben Bernanke's message was clear -- that the economy is too weak for any interest rate increases for "the foreseeable future," with government spending cuts and high unemployment still a significant hurdle to recovery.
But market reactions were mixed.
Bonds pushed higher on the prospect of easing interest rates, but the dollar also gained.
At 2200 GMT, the euro fell to $1.3125, down from $1.3164 late Tuesday.
The dollar also gained to 99.60 yen from 99.04, while the euro pushed to 130.73 yen from 130.43.
Bernanke's testimony in Congress "left forex traders confused as ever," said Kathy Lien of BK Asset Management.
"But avoiding a one directional reaction is most likely the Fed Chairman's intention," she said.
Bernanke colored his comments on the economy and Fed policy with more worries about the current downside, which supported dovish views about tightening monetary policy.
At the same time, he said economic growth was moderate with solid signs of strength in various areas, a view supported by the Fed's Beige Book report on regional economies, also released on Wednesday.
"The main takeaway from today's speech is that while Bernanke is in no rush to raise interest rates and he still plans to taper asset purchases this year, he understands the need to carefully manage market expectations and to reassure investors that any decision will depend on data," Lien said.
In other currencies, the British pound rose to $1.5216 from $1.5155, while the dollar added to 0.9410 Swiss franc from 0.9391
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