In early trading in Tokyo, the Euro rose to its highest level versus the U.S. Dollar since August 2008, trading just shy of $1.5000. The fall of the greenback is attributed to comments made yesterday by a host of central bankers, including the U.S.’s Fed Chairman, Ben Bernanke, who suggested that global imbalances could be rectified through greater flexibility in the currency markets. The implication of “global imbalances,” according to one foreign exchange strategist, is a weak dollar. As reported at 1:59 p.m. (JST) in Tokyo, the U.S. Dollar Index slipped to 75.206 .DXY, a decline of .4%; earlier it had fallen to 75.117 .DXY, the lowest trade in 14-months. The U.S. Dollar continues to be under pressure with key interest rates at historic lows and questions about the greenback’s position as the global reserve currency.
At yesterday’s meeting of Euro-zone finance ministers, Jean-Claude Trichet, the president of the European Central Bank, indicated that while foreign exchange rates had been discussed, they continue to support the position of the U.S. government that a stronger U.S. Dollar is in the best interests of America. Traders were hoping that Trichet would comment, instead, about the single currency’s Euros appreciation in recent months, but the ECB bank president was silent on the subject.