Euro rallies against dollar on Bernanke comments

The European single currency rallied against the dollar on Monday after US Federal Reserve chief Ben Bernanke indicated that the US central bank would likely keep its easy money policy for the time being. At around 1520 GMT, the euro jumped as high as $1.3340 -- the highest point since March 1. It later stood at $1.3333, up from from $1.3268 in New York late Friday. Fed Chairman Bernanke signalled Monday that the Fed was likely to keep its stimulative policies in place despite improvements to the labor market. "A wide range of indicators suggests that the job market has been improving, which is a welcome development indeed," he said in a speech. "Still, conditions remain far from normal, as shown, for example, by the high level of long-term unemployment and the fact that jobs and hours worked remain well below pre-crisis peaks, even without adjusting for growth in the labor force. "Moreover, we cannot yet be sure that the recent pace of improvement in the labor market will be sustained." For more than three years the Fed has maintained a rock-bottom interest rate and bought US bonds to force down long-term interest rates with the aim of getting growth back on a solid, sustainable base and bringing down the high rate of unemployment. Bernanke stressed the weakness of recent gains and the need to keep up the Fed's current stance. "Euro/dollar leapt ... in less than 20 minutes after Bernanke's dovish comments," said strategist Ashraf Laidi at financial spread-betting firm City Index. "The Fed chairman dragged down the greenback and boosted metals in another dovish speech ... justifying prolonged low rates ahead," he added.