The U.S. dollar fell Thursday against the euro despite upbeat comments this week from U.S. Federal Reserve Chairman Alan Greenspan on the state of the U.S. economy. The euro bought US$1.3060 in afternoon trading in Europe, up from US$1.3034 late in New York on Wednesday.
The dollar also slipped against other major rivals, buying 105.29 yen versus 105.36 the day before. The British pound rose to US$1.8890 from US$1.8860 late in New York.
The euro soared from about US$1.20 in September to an all-time high of US$1.3667 at the end of December before leveling off around the US$1.30 mark. But concerns about the ballooning U.S. trade and budget deficits that have driven the 12-nation currency's surge have not gone away and many analysts expect the euro to move past US$1.40 this year.
In testimony before the Senate Banking Committee in Washington on Wednesday, Greenspan indicated that the Fed is likely to continue gradually increasing interest rates -- a course that would make U.S. bonds more attractive to investors.
He said that the U.S. economic expansion rolled into the new year at a respectable pace and that inflation, while not an immediate threat, is something policy-makers must continue to guard against.