Dollar rallies against other currencies

The dollar staged a rally against other currencies on Thursday after Federal Reserve chairman Alan Greenspan’s Thursday appearance before a Congressional committee, in which he gave an optimistic assessment of the US economy.

Included in Mr. Greenspan’s remarks were his opinion that the US economy is on “a reasonably firm footing” an that inflation remains in check. He did, however, say that there remains a risk that inflation might go up.

He also signaled that interest rates will likely continue to rise, but he gave no indication as to how much or for how long.

The dollar gained 0.4 percent in relation to the euro to $1.2177 and was up 0.5 percent against the yen to ¥107.76.

It also rose 0.3 percent to $1.8176 in relation to sterling, as well as going up 0.5 percent to C$1.2579 against the Canadian dollar.

Also helping the dollar Thursday was JP Morgan’s estimate of a 4.25 percent interest rate by the end of the year and predictions of strengthening of the dollar by March 2006 to $1.18 in relation to the euro and to ¥110 against the yen.

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