Comments from Federal Reserve Bank of Atlanta President Dennis Lockhart caused the dollar to drop against the yen on speculation the central bank will keep borrowing costs low. It is the first time in eight days that USD fell against JPY.
The dollar dropped 0.2 percent to 83.87 yen at 10:11 a.m. in New York, from 84.06 on April 1.
In a speech today in West Palm Beach, Florida, Lockhart said the U.S. recovery will probably persist, while buffeted by government spending cuts and reductions in consumer debt. Ã¢â‚¬Å“With each quarter, the recovery is increasingly well established,Ã¢â‚¬Â he said. Ã¢â‚¬Å“However, underlying the recovery there remain serious imbalances that have not been corrected.Ã¢â‚¬Â
The U.S. central bank may be able to cut about $100 billion from its plan to buy $600 billion in Treasury securities through June, according to the St. Louis Fed president James Bullard. He and other Fed regional presidents indicated optimism on U.S. growth in speeches last week.
Fed Chairman Ben Bernanke said in March that until conditions show significant improvement, the Fed will hold the line on interest rates for an Ã¢â‚¬Å“extended periodÃ¢â‚¬Â and he has given no indication he wants to tighten credit with unemployment still high.
U.S. nonfarm payrolls rose by 216,000 in March, and the unemployment rate fell to 8.8 percent, a two-year low, the Labor Department reported April 1.
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