The dollar rose to a more than three- month
high against the yen after Federal Reserve Chairman Ben S. Bernanke said
risks to the U.S. economy have diminished, prompting traders to increase bets
on higher interest rates.
The U.S. currency gained for a second
day against the euro. U.S. Treasury Secretary Henry Paulson said
yesterday in an interview with CNBC that he would ``never'' rule out currency
intervention to prop up the dollar.
The dollar has fallen 11% against the euro and
7.7% versus the yen since September, when the Fed began to lower
borrowing costs from 5.25%. Paulson told CNBC he hasn't ruled out any policy
option to support the dollar, including intervention in the foreign-exchange
market.
Finance ministers of
the Group of Eight industrialized countries may consider joint action to deflate
the price of oil and prop up the dollar at their meeting June 13-14 in Japan, said DBS Group Holdings Ltd.
in a report to clients.
The last time the major industrialized
countries intervened was on Sept. 22, 2000, when they bought
the euro after it tumbled 27% from its 1999 debut. They last propped up the
dollar in 1995, when it sank almost 20% in four months against the Japanese yen
to a post-World War II low.