Euro Back Above $1.30 After Dollar Slip

The euro climbed to a three week high on Wednesday after US Federal Reserve Chairman Ben Bernanke made comments which indicated that the Fed was planning to continue with an accommodative monetary policy for the remainder of the year. The common currency remained above $1.30 on Thursday morning and traded at $1.3132. After the US Federal Reserve announced that it would begin to taper its bond buying stimulus program, the dollar has been climbing as investors try to predict when the bank will start rolling in the program. However, traders were surprised when the minutes from the Fed's July meeting revealed that several of the bank's board members wanted to see a larger improvement in the labor market before they would consider pulling back the bank's funding.

On Wednesday, Bernanke announced that the bank wasn't planning to cut the $85 billion per month bond buying program in the near future. According to

, he said the bank's monetary policy would remain accommodative and that the current unemployment figures may understate the labor market's lingering weakness. The comments, which were more dovish than expected, sent the dollar tumbling and boosted several other currencies, including the euro. Many think the market has over-reacted to the news, and are expecting to see some correction in the near term. Since the Fed is still planning to taper its funding at some point in the future and the US economy is expected to continue outperforming most other developed economies, most analysts are expecting to see the greenback on the rise again soon.