Bernanke and Trichet Give Dollar a Boost
NEW YORK -- The dollar gained sharply against the euro Thursday after European Central Bank President Jean-Claude Trichet threw cold water on the idea the central bank would soon embark on the path of increasing key rates.</br></br>The greenback got an extra boost against its rivals on Federal Reserve Chairman Ben Bernanke's slightly more optimistic tone on the pace of the U.S. recovery, with the Fed chief issuing what investors interpreted as a more rosy assessment of the labor market.</br></br>Stronger-than-expected economic data, along with a flight to safety as tensions in Egypt flared, also added to the dollar's banner day, in which the ICE Dollar Index, which tracks the greenback against a trade-weighted basket of its peers, gained nearly 1%.</br></br>"The sea change from Trichet remains the most interesting thing to markets today," said Brian Dolan, chief currency strategist at Forex.com in Bedminster, N.J. Investors had interpreted recent talk from the euro zone's chief central banker to mean the ECB could soon act to strangle rising inflation. Instead, Trichet issued a steady-on statement.</br></br>The euro fell swiftly against the dollar and yen as Mr. Trichet said current interest rates remain "appropriate" and the current policy stance is "accommodative."