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Dollar Advances as Bernanke Says Fed May Taper Soon

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May 22 (Bloomberg) -- The dollar rose against most major counterparts as Federal Reserve Chairman Ben S. Bernanke said the central bank could taper its monthly bond purchases at its next few meetings if it can be confident of sustained gains in the economy.

The greenback earlier touched a one-week low versus the euro as Bernanke told Congress the U.S. economy remains hampered by high unemployment and government spending cuts, and tightening policy too soon would endanger the recovery. The yen slid against the dollar and euro after the Bank of Japan affirmed a plan to double the monetary base over two years and its statement showed no concern about rising bond yields.

Bernanke’s comment “is what the U.S. dollar bulls will latch onto,” said Brad Bechtel, managing director at Faros Trading LLC in Stamford, Connecticut.

The dollar gained 0.2 percent to $1.2886 per euro at 11:09 a.m. in New York after falling earlier to $1.2998, the weakest level since May 14. The yen slid 0.8 percent to 133.32 per euro and reached 133.80, the least since January 2010. Against the dollar, the yen declined 0.9 percent to 103.41 and touched 103.61, the weakest since October 2008.

To contact the reporter on this story: John Detrixhe in New York at jdetrixhe1@bloomberg.net

To contact the editor responsible for this story: Dave Liedtka at dliedtka@bloomberg.net

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