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Dollar Gains Most in 2 Months as Bernanke Signals Bond-Buy Taper

The dollar rallied the most in two months versus the euro as Federal Reserve Chairman Ben S. Bernanke said the central bank could reduce its bond-buying this year and end it in 2014 if economic improvement continues.

The U.S. currency gained versus a majority of its 16 most-traded peers as Fed policy makers will keep buying bonds at a pace of $85 billion a month for now. They also said risks to the economy have decreased and lowered forecasts for the unemployment and inflation rates this year. Europe’s 17-nation currency had reached almost its highest level against the dollar since February and the yen rallied earlier today while Sweden’s krona touched a two-month high versus the dollar.