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Reserve Chairman Ben Bernanke hinting that US interest rates could be
on the rise. The single European currency in late-day trade was at
1.4713 dollars after 1.4791 late Thursday in New York. The dollar
was meanwhile trading at 89.48 yen against 89.48 yen, up from
88.39. The euro slide came at the end of a week during which the
single currency had risen steadily against the dollar, powered by
strong stock market performances and increased public agitation for
closer scrutiny of the dollar's status as the world's reference money.
The euro at one point came close to hitting its year-long high of
just over 1.48 dollars. But dampening appetite for the euro on Friday
were remarks on Thursday from Bernanke indicating that interest
rates in the United States would need to be raised when the "
economic outlook has improved sufficiently." A hike in the US interest
rates would make the dollar more attractive to investors. The US
currency had recently come under downward pressure from speculation
that the United States would be slower to tighten monetary policy
than other central banks. That interpretation had encouraged investors
shun the dollar in favor of the euro. The US trade deficit was
meanwhile reported Friday to have narrowed for the first time in
four months in August on higher exports driven by a weak dollar and
lower imports in the face of lackluster domestic demand.
