Dollar extends losses after Bernanke testimony

By Ben Rooney, staff reporter

NEW YORK ( -- The dollar extended losses Wednesday as investors responded to reports on retail sales and inflation, and comments from the Federal Reserve.

What prices are doing: The dollar slid 0.3% versus the euro to $1.3654 and dropped 0.6% against the U.K. pound to $1.5448. The dollar remained flat versus the Japanese yen at ¥93.20.

What's moving the market: Retail sales rose more than expected in March, while consumer prices remain tame, according to government reports.

The Commerce Department said total retail sales jumped 1.6% in March, the largest monthly increase since November, from an upwardly revised 0.5% gain in February.

Separately, the Consumer Price Index, the government's main inflation gauge, rose 2.1% in February from the previous year. Over the past 12 months, CPI has increased 2.3%, driven by a 41% climb in gasoline costs during the period.

Core CPI, which strips out volatile food and energy prices, was up 1.1% from a year earlier. In February, it inched 1.3% higher year over year.

In addition to economic news, traders also focused on Capitol Hill, where Federal Reserve Chairman Ben Bernanke testified before a congressional committee.

He said that while demand in the private sector will be "sufficient" to spur a moderate recovery, more time is needed to recover job losses.

Bernanke reiterated that the Federal Reserve will keep interest rates near historic lows.

What analysts are saying: Markets were looking for hints for when the Fed might tighten monetary policy, said analysts at Sucden Financial in a research report.

But Bernanke did not provide any new information, and just reiterated its most recent policy statement that said interest rates will remain "exceptionally low" for an "extended" period of time.

"A dovish tone would tend to keep the dollar under some selling pressure," the report said. To top of page

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