Dollar rises in Asia

The dollar rose on Friday after Federal Reserve Chairman Ben Bernanke indicated monetary policy may have to be tightened as a recovery takes hold, lifting the greenback off 14-month lows against a basket of currencies.
Traders said Bernanke's remarks, although not new, prompted speculators to cover short dollar positions and lifted the US currency against the yen by more than 1 percent at one point as more market players lightened positions ahead of Japan's long weekend.
The dollar has succumbed to selling pressure in recent weeks, hurt by the market view that US interest rates are likely to remain low for some time. But Bernanke said late on Thursday that the Fed has the tools and the ability to pull back its flood of cash and loans to the economy - one of the main reasons behind the dollar's broad weakness - while he reiterated that accommodative policies are likely to be needed for an extended period.
"Bernanke's comments suggest he does not like the dollar sliding against the euro," said Hideki Amikura, deputy general manager of the forex section at Nomura Trust Bank in Tokyo.
Some traders took Bernanke's comments as a response to European Central Bank president Jean-Claude Trichet, who said US support for a strong dollar was important and that excessive foreign exchange moves were unwelcome, though Trichet has said the same thing before. The euro fell 0.4 percent to $1.4728, nearly erasing gains made after Trichet's comments fell short of some market players' expectations that he would make a more forceful statement after the ECB's policy meeting to address the single currency's recent gains.
The euro had climbed as high as $1.4818 on trading platform EBS the previous day, near a one-year high of $1.4845 hit in late September. The dollar index, a gauge of the greenback's performance against six other major currencies, rose 0.4 percent to 76.266 after having slid as low as 75.767 on Thursday, its lowest since August 2008. The dollar rose as high as 89.32 yen on EBS from an earlier low of 88.36 yen, before trading at 89.23 yen, up 0.9 percent.
Gold fell below $1,050 per ounce on Friday, snapping a rally that took prices to record highs above $1,060 for three consecutive days. More comments defending the dollar came from top US presidential adviser Lawrence Summers, who said Treasury Secretary Timothy Geither has made clear that the United States is committed to a strong dollar.
But Nomura Trust's Amikura said the market was still mostly bearish about the greenback as the Fed was expected to find it difficult to exit its current loose monetary policy due to the high US unemployment rate. That was despite US data showing the number of workers filing for new jobless claims hitting a 9-month low.
Bearish sentiment for the dollar has led market players to favour higher-yielding currencies amid an improved appetite for riskier assets such as stocks and commodities. Asian stock markets tracked Wall Street higher on a surprisingly strong start to the US Q3 earnings season after Alcoa posted a quarterly profit. The Australian dollar slipped from 14-month highs of $0.9092 touched the day before, but held above 90 US cents buoyed by expectations of further rate hikes after strong local jobs data for September.