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July 13th, 2013 
Peter Nolan
THE US dollar has regained ground against the euro after two days of losses driven by Fed chief Ben Bernanke’s pledge to hold interest rates low.
But traders said on Friday volatility would be the byword in the foreign-exchange markets for days and weeks ahead as traders wait for clearer data on the path of economic growth in the United States, Europe, China and Japan.
At around 2200 GMT (0800 AEST), the euro was at $US1.3067, compared to $US1.3092 late Thursday.
The dollar rose to 99.29 yen, up from 98.90 yen, and the euro moved to 129.74 yen from 129.50.
The dollar had lost ground for two days on Bernanke’s efforts Wednesday to stress that even if the US Federal Reserve pulls in its $US85 billion-a-month bond-buying program, it would not raise its base interest rate for the foreseeable future.
That pulled strength away from the dollar after it had surged on expectations of the Fed tightening monetary policy earlier than its 2015 forecast.
A fall in the University of Michigan consumer confidence index on Friday, and more signs of weakness in China and Europe, gave support to Bernanke’s argument that the US economic recovery remains frail.
Even so, analysts argued that the picture for the dollar was one of relative strength, and that the Fed would begin to taper bond purchases, known as quantitative easing, this year.
“We did not feel that Bernanke’s comments altered the timing for tapering enough to warrant the sharp reversal in the greenback,” said Kathy Lien of BK Asset management.
“If the US economy continues to recover, the central bank may opt to become more vocal about their intentions in order to prepare the market for a change in monetary policy and when that occurs, the process should be positive for the dollar.”
The British pound slipped to $US1.5102 from $US1.5185, while the dollar fell slightly against the Swiss franc, to 0.9466 franc.
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