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Dollar mixed against major currencies after Bush, Bernanke speeches

Dollar mixed against major currencies after Bush, Bernanke speeches

The dollar traded mixed Friday after speeches by President George W. Bush and Federal Reserve Chairman Ben Bernanke comforted investors about troubles in the mortgage and credit markets.
The comments, along with encouraging U.S. economic data, prompted traders to sell off the safe-haven dollar in favor of riskier assets overseas.
The 13-nation euro dipped to $1.3624 in late New York trading from $1.3637 late Thursday, while the British pound rose to $2.0165 from $2.0135.
The dollar edged up against the Japanese currency, climbing to 115.81 yen from 115.74.
Bernanke, speaking at the Fed's annual conference in Jackson Hole, Wyoming, said the central bank will "act as needed" to prevent the credit crisis from dragging down the overall economy. He did not, however, indicate that the central bank plans to cut interest rates anytime soon, as investors had hoped.
Analysts have similarly raised doubts about prospects for the European Central Bank raising its key refinancing rate to 4.25 percent next month, following mounting problems with credit availability.
Lower interest rates, used to jump-start the economy, can weaken a currency by giving investors lower returns on investments denominated in it.
Also Friday, President Bush announced a plan for the federal government to help troubled home loan borrowers avoid foreclosure as a result of the mortgage crisis.
Bush said the Federal Housing Administration, a government agency that provides mortgage insurance to borrowers through lenders in the private sector, would soon launch a program called FHA Secure.
The program would allow homeowners who have good credit histories but who can't afford their mortgage payments to refinance into mortgages insured by the FHA.
Positive economic news released Friday also boosted the dollar as part of an atypically busy session leading into the long Labor Day weekend, said Michael Woolfolk, a senior currency strategist at the Bank of New York.
"I'm calling this the trifecta. The Bush speech, the Bernanke speech and the U.S. data today," he said. "It was one of the biggest days for the foreign exchange market this month."
The Commerce Department reported on personal income and spending and the core personal consumption expenditures deflator, a closely watched gauges of inflation. Personal incomes and spending rose 0.5 percent and 0.3 percent, respectively, and year-over-year core PCE held steady at 1.9 percent _ within the Fed's comfort range.
In other New York trading, the dollar bought 1.2079 Swiss francs, up from 1.2027 late Thursday, and 1.0550 Canadian dollars, down from 1.0586.


Updated : 2021-03-03 11:14 GMT+08:00