Dollar suffers broad losses

The dollar suffered broad losses on Friday after a Federal Reserve official's comments raised doubts over how quickly the US central bank would raise interest rates.
Federal Reserve Board Governor Ben Bernanke said on Thursday the bank should be able to push interest rates up at a gradual pace, wrong-footing many who had bet on aggressive rate hikes to cool the fast-growing US economy.
With expected returns on US deposits looking less appealing, the greenback slid to its lowest in two weeks against the euro, yen and British pound.
"Bernanke's comments have made people more cautious about aggressive US rate hikes but positioning has also been behind the dollar's fall," said Shahab Jalinoos, senior currency strategist at ABN AMRO.
"At the moment conviction is low and intra-day ranges are high."
By 1200 GMT, the dollar was nursing losses of three-quarters of a percent at 111.91 yen and $1.2045 per euro.
Sterling also rose to a two-week high against the dollar as robust mortgage lending data bolstered market expectations that British interest rates would rise significantly over the course of the year.
British mortgage lending rose 6.4 billion pounds in April, its fastest pace since the British Bankers' Association records began in 1997.
With no major US data releases scheduled, investors focused on a weekend meeting of Group of Seven finance ministers in New York and an informal gathering of Opec ministers in Amsterdam.
Surging oil prices have weighed heavily on growth-sensitive Asian and high-yielding currencies, although a sharp rebound in Japanese stocks on Friday helped the yen recoup some of its recent losses against the dollar.
"Higher oil prices hurt equities and are bad for the Asian economy but the Nikkei actually sustained this week's gains," said Mansoor Mohi-uddin, chief currency strategist at UBS.
"The Nikkei and dollar/yen are highly correlated at the moment."
Ahead of the informal meeting in Amsterdam, UAE oil minister Obaid al-Nasseri said factors pushing oil prices higher were beyond the cartel's control.
Opec ministers have said they will leave a formal decision on a production increase until their official meeting in Beirut on June 3.
G7 ministers meeting in New York are likely to discuss the effect of higher oil prices on the global economy. Japanese Finance Minister Sadakazu Tanigaki said interest rates may also be discussed.