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Dollar retreated on Fed Governor comments

The dollar rebounded against European currencies on Thursday despite weaker
than expected regional manufacturing survey before retreating later in the day
on comments by the Fed Reserve Board Governor.

Euro fell against the dollar to as low as 1.1895 before rebounding strongly in
late U.S. session after the Federal Reserve Board Governor Ben Bernanke said
the current level of energy costs was not high enough to be a major issue for
the U.S. economy, inflation was stable and the U.S. central bank was likely to
adopt a gradual tightening of monetary policy. The comments tempered the
market's aggressive interest rate hike sentiment. Dollar also retreated
against Swiss franc from 1.2923 to as low as 1.2844 in late U.S. session. Cable
traded in a volatile manner as the sterling fell initially from 1.7850 to as
low as 1.7635 before rebounding strongly to 1.7779 in tandem with euro.

Earlier in the day, the greenback weakened moderately on news that first-time
jobless claims rose unexpectedly to 345,000 in the week ended May 15. The
number topped expectations of 326,000 claims. The Philadelphia Federal Reserve
Bank said its gauge of mid-Atlantic regional industry slowed to 23.8 in May
from 32.5 in April. The consensus was for a reading of 32.0.

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