Dollar slips after Bernanke opens door to rate cuts

NEW YORK, Feb 14, 2008 (AFP) – The dollar eased against other major currencies Thursday after US Federal Reserve chairman Ben Bernanke highlighted economic risks, signaling further interest rate cuts to bolster growth. Around 2200 GMT, the euro was at 1.4637 dollars, up from 1.4573 dollars in New York late Wednesday.

The dollar also fell to 107.94 yen from 108.30 Wednesday after stronger-than-expected Japanese economic growth figures.

Bernanke said there were significant risks the current US slowdown could deepen, with the Fed prepared to “act in a timely manner, if needed, to support growth and provide adequate insurance against downside risks.”

Dealers said the market took the remarks to confirm expectations that the Fed will cut rates by another half a percentage point at its March 18 meeting, having already slashed them by 1.25 points in January to 3.00 percent.

“Bernanke’s comments … indicate that the Fed is open to further interest rate cuts,” said Paul Ashworth at Capital Economics.

“Certainly his prepared remarks will do nothing to change market expectations of another 50 basis point cut at the Fed’s next scheduled meeting in mid-March,” he said.

Bernanke told the US Senate he e