( From RTTNews)
The dollar was uncertain Friday morning after China's central bank hiked its reserve requirements -- another measure designed to cool off its economy.
The buck lost ground to the euro but was only slightly weaker against the sterling and yen. The People's Bank of China will raise the reserve ratio by 50 basis points later this month in an effort to step up liquidity management and appropriately control credit and loans.
Meanwhile, Fed Chairman Ben Bernanke was in Europe responding to criticism that the US central bank's latest round of asset purchases was designed to weaken the dollar. He argued more monetary easing was necessary to bring down high unemployment in U.S., and that the best way to support the dollar was with economic growth. "The best way to continue to deliver the strong economic fundamentals that underpin the value of the dollar, as well as to support the global recovery, is through policies that lead to a resumption of robust growth in a context of price stability in the United States," Bernanke told a European Central Bank conference in Germany. The dollar fell further versus the euro amid speculation that Ireland is prepared to accept a massive sovereign debt bailout and allow an emergency fund to backstop its banking system. The buck slipped to $1.3725 against the euro, moving back toward a 10-month low near $1.43 set earlier this month. Germany's producer price inflation accelerated in October from the previous year, the Federal Statistical Office said on Friday. The producer price index rose 4.3% year-on-year in October, faster than a 3.9% growth in the previous month. Producer prices increased for the seventh consecutive month. Economists had expected inflation to rise to 4.1%. The dollar was steady near $1.6000 against the sterling, after fighting back from some overnight losses. A lack of direction versus the yen left took the dollar to Y83.45, near yesterday's monthly high of Y83.77. There is no first-tier economic data on tap from the United States today.
Meanwhile, Fed Chairman Ben Bernanke was in Europe responding to criticism that the US central bank's latest round of asset purchases was designed to weaken the dollar. He argued more monetary easing was necessary to bring down high unemployment in U.S., and that the best way to support the dollar was with economic growth. "The best way to continue to deliver the strong economic fundamentals that underpin the value of the dollar, as well as to support the global recovery, is through policies that lead to a resumption of robust growth in a context of price stability in the United States," Bernanke told a European Central Bank conference in Germany. The dollar fell further versus the euro amid speculation that Ireland is prepared to accept a massive sovereign debt bailout and allow an emergency fund to backstop its banking system. The buck slipped to $1.3725 against the euro, moving back toward a 10-month low near $1.43 set earlier this month. Germany's producer price inflation accelerated in October from the previous year, the Federal Statistical Office said on Friday. The producer price index rose 4.3% year-on-year in October, faster than a 3.9% growth in the previous month. Producer prices increased for the seventh consecutive month. Economists had expected inflation to rise to 4.1%. The dollar was steady near $1.6000 against the sterling, after fighting back from some overnight losses. A lack of direction versus the yen left took the dollar to Y83.45, near yesterday's monthly high of Y83.77. There is no first-tier economic data on tap from the United States today.
