The dollar rallied the most in two months versus the euro as Federal Reserve Chairman Ben S. Bernanke said the central bank could reduce its bond-buying this year and end it in 2014 if economic improvement continues.
The dollar fell against all of its 16 most-traded peers amid bets Federal Reserve Chairman Ben S. Bernanke will signal the central bank plans to maintain bond purchases that risk debasing the currency.
The yen rallied the most since July 2009 amid the highest volatility in a year as investors reassess the Bank of Japan’s monetary stimulus measures that pushed the currency to a four-year low last month.
Ever since Standard & Poor’s stripped the U.S. of its AAA credit rating almost two years ago, the unemployment rate has fallen, household wealth has reached a record and the budget deficit is shrinking. More downgrades may be coming, anyway.