LONDON — The dollar was mixed Tuesday as traders weighed Federal Reserve chairman Ben Bernanke's remarks that the US economy was improving but not enough to warrant a shift in monetary policy.
In late morning trading here, the European single currency dipped to 1.4191 dollars from 1.4227 dollars in New York late on Tuesday.
The dollar fell to 93.45 yen from 93.73 yen reached late Tuesday.
Investors were closely watching stock markets and any clues on the outlook for major economies, said Marito Ueda, currency dealer at FX Prime.
Global stock markets have enjoyed a rebound recently on signs of an improvement in the US economy and corporate earnings.
Bernanke, delivering his semi-annual economic report to Congress on Tuesday, cited "notable improvements" in financial markets and a somewhat brighter economic outlook.
"In light of the substantial economic slack and limited inflation pressures, monetary policy remains focused on fostering economic recovery," he said.
Standard Chartered analysts wrote in a note that Bernanke had "surprised the markets with a more dovish statement than expected, highlighting that the Fed's focus remained firmly on growth... and that interest rates would remain low."
"As global growth expectations stabilise and risk appetite improves, we expect the US dollar to fall off a cliff, as it did in 2002 after the US economy bottomed out at end-2001," they added.
Meanwhile, the euro was dampened by downbeat economic data in the recession-mired eurozone.
Factories in the 16 nations using the euro single currency saw demand fall in May compared with April, contrary to expectations, according to official EU data released on Wednesday.
New industrial orders fell by 0.2 percent in May, the European Union's Eurostat data agency said, bringing the drop over 12 months to 30.1 percent.
They fell 0.7 percent in April, according to revised figures.
Analysts polled by Dow Jones newswire had forecast a rise of 2.0 percent in May.
In the full 27-nation European Union, new industrial orders rose by 0.9 percent in May compared to April, leaving a decrease of 28.0 percent over the year from May 2008.
Markets were also watching political developments in Japan as campaigning gets under way ahead of an August 30 general election that Prime Minister Taro Aso's long-ruling party looks likely to lose.
In trading here on Wednesday, the euro was changing hands at 1.4191 dollars against 1.4227 dollars late on Tuesday, 132.61 yen (133.35), 0.8662 pounds (0.8635) and 1.5167 Swiss francs (1.5164).
The dollar stood at 93.45 yen (93.73) and 1.0688 Swiss francs (1.0657).
The pound was at 1.6384 dollars (1.6463).
On the London Bullion Market, the price of gold decreased to 946.92 dollars an ounce from 947.75 dollars an ounce late on Tuesday.
