27 April 2006, 13:56  The dollar snapped a four-day drop against the euro

The dollar snapped a four-day drop against the euro on speculation Federal Reserve Chairman Ben S. Bernanke may signal two more interest-rate increases this year. The U.S. currency slid to a seven-month low this week after stronger-than-forecast economic reports failed to allay traders' expectations that rates in Europe will rise faster than in the world's largest economy. ``Bernanke will not say the Fed is almost done on rate hikes, supporting the dollar,'' said Teruhisa Tsuji, a trader in Tokyo at Mizuho Corporate Bank Ltd., a unit of Japan's second- largest lender by assets. ``He may say the U.S. economy remains robust while there is increased inflation risk.'' The dollar traded at $1.2443 per euro at 8:30 a.m. in London, compared with $1.2454 yesterday in New York when it reached $1.2471, the weakest since Sept. 7. It was at 114.71 yen from 114.73. The U.S. currency will trade between $1.2380 and $1.2480 per euro today and 114.30 yen and 115.40 yen, Tsuji said. Bernanke will speak today to the Joint Economic Committee of Congress. Labor markets in the U.S. are ``tightening'' and companies are having trouble passing on higher energy costs, a central bank report showed yesterday. Economic expansion was described by three of the Fed's dozen district banks as ``solid'' and by others as ``modest, moderate or steady,'' the bank said yesterday.

© 1999-2024 Forex EuroClub
All rights reserved