FOREX-Dollar slips vs euro after Bernanke's comments

Reuters

* Euro edges up vs dollar on Bernanke and stops - traders

* Bernanke: Fed committed to easy policy for as long asneeded

* Euro's rise vs dollar helps euro set 4-year high vs yen

By Masayuki Kitano and Ian Chua

SINGAPORE/SYDNEY, Nov 20 (Reuters) - The dollar edged lowerversus the euro on Wednesday after U.S. Federal Reserve ChairmanBen Bernanke said the Fed will maintain its ultra-easy monetarypolicy for as long as needed.

The euro rose 0.1 percent to $1.3554. Earlier onWednesday the single currency touched a high of $1.3584 ontrading platform EBS, its loftiest level since Nov. 1.

Traders said the euro's rise gained a bit of added steam dueto stop-loss buying, adding that its push higher versus thedollar helped lift it against the yen as well.

Bernanke's speech "was enough to ram euro/dollar up throughthe stops and kick cross/yen higher," said a U.S.-based currencytrader.

In a speech that echoed dovish comments by his nominatedsuccessor, Janet Yellen, Bernanke said that while the economyhad made significant progress, it was still far from whereofficials wanted it to be.

Bernanke said officials want evidence of durable job growthbefore scaling back the Fed's bond-buying stimulus. He addedthat interest rates were likely to remain near zero for aconsiderable time after the asset purchases end.

The euro held steady against the yen at about 135.54 yen, having set a four-year high of 135.95 earlier, itshighest level versus the Japanese currency since October 2009.

The dollar eased 0.1 percent to 100.03 yen, backingaway from a two-month high near 100.43 yen set last Friday.

Analysts said the low-yielding yen is still the preferredfunding currency for carry trades, with the Bank of Japanexpected to maintain its ultra-loose monetary policy at itspolicy decision on Thursday.

Later on Wednesday, the yen may take its cues from a reporton planned reforms to Japan's public pensions including theGovernment Pension Investment Fund.

People familiar with the process say the final report willlikely add details and a clearer direction to a preliminarySeptember report that recommended the GPIF shift away from verylow-yielding Japanese government bonds. The report is expectedto be released at around 0830 GMT.

AUSTRALIAN DOLLAR

The Australian dollar slipped 0.2 percent to $0.9413, after having met solid offers at levels near $0.9450.

Not helping were comments from Reserve Bank of AustraliaAssistant Governor Guy Debelle that a fall in the Aussie wouldbe preferable, an oft-stated position by the central bank.

The U.S. dollar had already been unsettled after Chinasignalled on Tuesday it was willing to tolerate a stronger yuan,meaning it is less likely to buy U.S. dollars to keep itscurrency pinned down.

China's central bank chief, Zhou Xiaochuan, vowed to quickenthe process of full yuan convertibility that will see the bankexit from regular intervention on the currency market.

For years, the central bank has bought up foreign currency,mostly U.S. dollars, to curb strength in the yuan fuelled by thecountry's export engine.

"Although no timeline was provided, the news should besupportive of further yuan appreciation," analysts at BarclaysCapital wrote in a note to clients.

"We continue to forecast USD/CNY at 6.00 in one year. Theimpact of further CNY FX changes for other Asian currencies ismore ambiguous. That said, the recent flurry of reform news outof China has helped boost Asian currencies and equities."

Later on Wednesday the focus will be on a batch of U.S.data, including retail sales and consumer prices, aswell as the minutes of the Fed's October policy meeting.

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