Dollar rises broadly in London

The dollar rose broadly on Friday after US Federal Reserve Chairman Ben Bernanke made clear he was thinking of an exit strategy from quantitative easing and low interest rates as the economy improves.
But its earlier gains were cut sharply by the Canadian dollar, which rose to a one-year high after data showed the Canadian economy added six times as many jobs as expected in September and a surprising fall in the unemployment rate.
After taking a beating for much of the week, the US currency recovered from a 14-month trough hit against a basket of currencies on Thursday and pulled further away from an 8 1/2-month low hit against the yen earlier in the week.
Bernanke said late on Thursday that the Fed had the tools and the ability to withdraw its flood of cash and loans to the economy - among the main reasons for the dollar's broad weakness - and reiterated that accommodative policies were likely to be needed for an extended period.
Jane Foley, research director at FOREX.com in London, said Bernanke did little more than state the obvious in that the Fed would be ready to tighten policy when the economy improves to prevent the emergence of inflation. "But the very fact that he is considering the timing of the first rate hike was enough to excite the market into covering short dollar positions," Foley said, noting the holidays in the United States and Japan on Monday.
By 1115 GMT the dollar index, which tracks the greenback against a basket of currencies, was up 0.15 percent to 76.05, above Thursday's 14-month low of 75.767. The dollar was up 0.3 percent against the yen at 88.70 yen, having earlier climbed as high as 89.42 yen. The dollar fell as low as 88.01 yen on Wednesday, its weakest since January. The euro slipped 0.2 percent to $1.4755, retreating from a two-week high around $1.4815 hit on Thursday.
European Central Bank President Jean-Claude Trichet said on Thursday US support for a strong dollar was important and that excessive currency moves were unwelcome. His comments came after the ECB held interest rates at 1.0 percent.
The Canadian dollar jumped to a one-year high after domestic employment figures showed over 30,000 jobs were created last month and the unemployment rate fell to 8.4 percent. The US dollar fell as low as C$1.0438, a one-year trough. "The figures may alleviate concerns that Canadian dollar strength is hurting industrial competitiveness, but the Bank of Canada will likely stay vigilant on the currency's movements," said Geoffrey Yu at UBS.