Bernanke comments help US dollar versus euro

Bernanke comments help US dollar versus euro

Story link: Bernanke comments help US dollar versus euro

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The US dollar strengthened in relation to the euro after US Federal Reserve Chairman Ben Bernanke said that there is reason to consider another fiscal stimulus package similar to the one passed earlier in the year by the US Congress that saw many taxpayers receive tax rebate checks in the mail.

It seemed unlikely, however, that any rebate would be passed before President George W. Bush leaves office in January.

Mr. Bernanke also made comments in testimony before the House Budget Committee that seemed to clear the way for another cut in US interest rates.

At just past noon in New York the US dollar traded at $1.3317 to the euro, while at the same time the yen was up versus the euro to ¥135.4887 while it took ¥101.745 to buy a dollar.

At the same time, the Indian rupee was weaker in relation to the greenback, trading at 49.055 rupees to the dollar, after the Reserve Bank of India cut interest rates there to 8 percent from 9 percent, while the Korean won strengthened versus the US dollar to 1,294.4 won to the dollar on an announced bank rescue by the South Korean government.

The Australia and New Zealand dollars were helped by the news that South Korea was becoming the latest nation in the region to pledge help to banks in a plan that will not only provide $30 billion in US dollars to banks there but will also guarantee $100 billion in bank debts.

In addition, the New Zealand dollar was helped by a statement from the New Zealand government that it might guarantee wholesale bank deposits after last week’s move to guarantee retail deposits in banks there.

In midday trade in New York the Australian dollar was worth 69.65 cents US while the New Zealand dollar was worth 61.89 cents US.