Image by r0b0r0b via Flickr
By James Quinn
In a rare moment of intervention into the currency markets from America's leading central banker, Mr Bernanke admitted the Fed is watching the dollar "closely" as part of its focus on employment growth and price stability.
Mr Bernanke stressed the dollar will remain "strong" and continue as a "source of global financial stability".
But his comments, part of a speech in New York, were not enough to stop the dollar's fall, easing 0.6pc against a basket of major currencies, allowing sterling to rise by more than a cent to $1.6830.
The Fed chairman went on to reiterate the central bank's earlier commitment to keeping US interest rates exceptionally low "for an extended period".
Barclays Capital's US economist Michelle Meyer interpreted Mr Bernanke's comments as "simply stating that the Fed will monitor the dollar…and…not suggesting that the Fed will try to target the dollar".
Bernanke's rare intervention fails to calm fears over weak dollar
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