The US dollar rebounded from early losses on Friday as investors parsed comments by US Federal Reserve Chairman Ben Bernanke and saw a reduced sense of urgency in cutting US interest rates.
The euro fetched US$1.3623, compared with US$1.3628 in New York late on Thursday. Earlier in the day it had reached a high of US$1.3719, its highest level since Aug. 9.
The US currency was trading at ¥115.76, from ¥115.86 on Thursday.
Bernanke, in his first speech since turmoil gripped financial markets at the beginning of the month, reassured that the US central bank was ready to smooth problems in the credit markets.
Analysts said the comments reinforced expectations that the Fed will cut its benchmark lending rate by 25 basis points to 5.0 percent at its next meeting in September.
But Michael Woolfolk at Bank of New York Mellon said the US dollar rebounded from early losses as Bernanke's comments were digested, and traders saw no urgency to trim the federal funds rate.
"Despite Bernanke's dovish comments, the [US] dollar rallied against the majors as players were disappointed that these comments were not stronger," Woolfolk said.
"The speech suggested that the Fed would cut the fed funds discount rate as a last resort, not a first resort. Moreover, there was no indication that an inter-meeting rate cut [before Sept. 18] was in the works."
As well as Bernanke's speech, jittery investors were soothed by plans announced by US President George W. Bush to help stretched home owners to keep hold of their homes amid rising defaults and foreclosures.
"Analysts expect that the moves by the White House to relieve the stress in the US mortgage market will be well received," said John Noonan at Thomson IFR Markets.
The US dollar showed little reaction to a series of economic indicators that were generally better than expected, including on personal income and spending, and factory orders. Analysts said these reports reflected the period before the credit crunch hit global financial markets.
In late New York trade, the US dollar rose to 1.2087 Swiss francs from 1.2044 on Thursday.
The British pound was being traded at US$2.0170 of Friday after US$2.0117 on Thursday.
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