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Dollar climbs back as Bernanke speaks, oil drops

Dollar climbs back as Bernanke speaks, oil drops

The dollar turned up against the major currencies Friday as Federal Reserve Chairman Ben Bernanke said he would "act as necessary" to control inflation at an economics conference and oil retreated once again.
The euro fell to $1.4808 in early New York trading Friday from $1.4877 late in New York the night before.
At the economic symposium in Jackson, Wyoming, Bernanke said the "financial storm" in the U.S. "has not yet subsided, and its effects on the broader economy are becoming apparent in the form of softening economic activity and rising unemployment."
He also said the inflation outlook is uncertain.
While the Fed can try to contain inflation by raising interest rates _ which could also support the dollar by making American investments more attractive _ growing unemployment and concerns about economic growth may stop it from doing so.
Lower interest rates can undermine a currency as investors transfer their funds to assets in countries with higher rates of return.
Meanwhile, light, sweet crude oil futures fell $2.96 to $118.22 a barrel. On Thursday, oil rose almost $6, while gold gained more than $22.
Investors have used oil as a hedge against a slumping dollar. The prices of oil and gold tend to move inversely to the dollar.
The British pound, meanwhile, erased its Thursday gains entirely, dropping to $1.8584 from $1.8751. On Wednesday, the pound was worth $1.8615.
On Friday, the British government said that economic growth in the U.K. was flat in the second quarter, the first time the economy didn't grow for almost 16 years. Economists say contraction in the July-September period is likely, meaning Britain could be in a recession. The U.K. housing market is the worst in 30 years, while inflation is twice the recommended government limit.
The dollar also rose to 109.97 Japanese yen from 108.65 yen.
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AP Economics Writer Jeannine Aversa contributed to this report.


Updated : 2021-05-17 22:31 GMT+08:00