11.16.2009

Dollar stuck near 15-month lows on benign rate view

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SYDNEY (Reuters) - The U.S. dollar was stuck near 15-month lows on Tuesday, though its broad downtrend was intact on a growing view that U.S. rates are likely to stay low for a while, giving a boost to dollar funded carry trades.

Federal Reserve Chairman Ben Bernanke signaled U.S. rates will stay at zero for some time in a New York speech, adding in a rare commentary about the U.S. dollar that the Fed was closely watching the currency's decline as part of its commitment to both jobs growth and price stability.

"He is telling us that despite the greenback's rapid decline, despite a rapid increase in risk appetite and the 'cross-currents' to inflation this represents, despite all that we are going keep rates at an exceptionally low level for an extended period," said Adam Carr, senior economist at ICAP."

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