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Summary Dollar rose against euro after Fed announced to buy more bonds to stimulate the U.S. economy.
The dollar is rising against the euro after comments from Federal Reserve Chairman Ben Bernanke made it seem less likely that the Fed will buy more bonds to stimulate the U.S. economy.Bernanke told lawmakers in Washington that the employment rate has improved more than expected. Analysts and traders interpreted his comments to mean that another round of bond-buying program wont happen.Thats good news for the dollar. Bond buying lowers interest rates and increases money supply. With more money in circulation, the value of the dollar that traders are holding decreases. The lower interest rates would make the dollar less attractive than other currencies that have higher interest rates.The euro fell to $1.3359 in afternoon trading Wednesday from $1.3459 late Tuesday.
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