Dollar Gains After Bernanke’s Inflation Comments

The dollar gained against the yen after Federal Reserve Chairman Ben S. Bernanke told Congress inflation has moved higher, boosting speculation the central bank won’t take further steps to support the U.S. economy.

The greenback erased losses against the euro after Bernanke said inflation is “higher” and “closer” to the central bank’s informal target than was the case in August 2010. Gold reached records in London and New York as investors sought reprieve from volatility. New Zealand’s dollar rose to a record against the dollar after a larger-than-forecast gain in gross domestic product.

“Everything is coming off following Bernanke’s speech, the market is doing a double take,” said Paresh Upadhyaya, head of Americas G-10 currency strategy at Bank of America Corp. in New York. “Yesterday, Bernanke did not follow through with what would it take for them to implement a third round of quantitative easing and that’s what may have created some confusion in markets and why markets perceived him to be dovish. Today he’s trying to make that clear.”

The dollar rose 0.1 percent against the yen to 79.06 at 1:22 p.m. in New York, from 78.98. It was little changed against the euro at $1.4146 from $1.4167. It earlier fell as much as 0.8 percent.