Dollar edges higher as Bernanke confirms stimulus

AP FILE PHOTO

NEW YORK — The dollar edged higher Tuesday against the euro after Ben Bernanke confirmed the US Fed’s stimulus program would continue, while the yen traded flat ahead of the nomination of a new Bank of Japan chief.

At 2200 GMT the euro was at $1.3061, compared to $1.3065 late Monday. The euro remained under pressure after Italy’s inconclusive election, which some fear could lead to more political trouble and policy stalemate in the country.

“Political uncertainty has increased in Italy following the election results weighing upon the euro and risk assets,” said Lee Hardman, currency analyst at the Bank of Tokyo-Mitsubishi UFJ in London.

In Washington, Federal Reserve Chairman Bernanke quelled speculation of an early end to quantitative easing when he told a Senate panel that the Fed’s stimulus program was having an impact and was still needed.

He said inflation remained subdued and the Fed was keeping its eye on any potentially risky behavior in the market due to low interest rates.

The Fed policy board “remains confident that it has the tools necessary to tighten monetary policy when the time comes to do so,” he added.

The yen was barely changed against the dollar at 91.93, and the euro was at 120.08 yen compared to 120.12 yen late Monday.

Markets were waiting for confirmation of who would be named to head the bank of Japan, after newspapers reported Monday that Asian Development Bank chief Haruhiko Kuroda, an advocate of a lower yen, would be named.

The British pound fell further, to $1.5126 from $1.5166 late Monday. The dollar was little changed on the Swiss franc, at 0.9315 francs.