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NEW YORK: The US dollar shot to a one-month high against the euro on Monday but later pared gains after comments by Federal Reserve chief Ben Bernanke dampened expectations of a hike in US interest rates.
The euro fell to 1.4819 dollars at 2200 GMT against 1.4852 dollars on Friday.
The dollar meanwhile fell to 89.57 yen from 90.47.
The single European currency earlier had dropped to 1.4756 dollars, a level last seen on November 4.
Fed chairman Bernanke stressed on Monday the US recovery was feeble, signalling interest rates will be kept extremely loose for some time to come.
"Though we have begun to see some improvement in economic activity, we still have some way to go before we can be assured that the recovery will be self-sustaining," Bernanke said in a speech to the Economic Club of Washington.
"Bernanke largely unravelled the force behind dollar strength, leaving currencies mixed in today's volatile session," said Kathy Lien of Global Futures and Forex.
"By pointing out the unconvincing strength in the employment market, Bernanke spelled an end to what was shaping up to be another day of strength in the greenback."
The dollar began to strengthen on Friday after a government report showed the US labour market had dramatically improved in November, with the number of jobs lost narrowing to 11,000 and the unemployment rate dropping to 10.0 percent from 10.2 percent.
"The bottom line is that Bernanke remains unimpressed by now what seems like a statistical anomaly in last Friday's non-farm payrolls report," Lien said.
The euro was also under pressure from news that German industrial orders posted the first drop for eight months in October, falling 2.1 percent, as the pace of recovery in Europe's biggest economy slackened.
Andreas Rees, economist at Unicredit, said the fall was an "an ugly reminder of what happens when the fiscal stimulus package is fizzling out."
Export-oriented Germany has been hit hard by the global recession, and is on course this year for its worst downturn since World War II despite massive stimulus measures.
In late New York trading, the dollar stood at 1.0199 Swiss francs, up from 1.0160 on Friday.
The pound slipped to 1.6420 dollars from 1.6456. - AFP/de
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