The euro was on the back foot in trading yesterday as investors bought back into the US dollar

The euro extended losses yesterday, dipping sharply to a two-week low of 1.4811 against the US dollar as investors turned more risk adverse.

• A subdued global equity market performance relieved some pressure on the dollar, although US stocks did moved slightly higher late in the New York session.
  
• Traders said the dollar's rise also reflected a delayed reaction to comments from Mr Bernanke, who said that the central bank was "attentive" to the implications of changes in the value of the dollar.
  
• Though the tone of his comments were not alarming, in just mentioning the currency it shows that the Fed is aware of market concerns and acknowledged the need to address the issue.
  
• ECB President Jean-Claude Trichet helped to extend the euro's losses following an interview with French newspaper Le Monde, in which he welcomed Bernanke's remarks and said the euro was never intended to be a reserve currency.
  
• The dollar took little notice from a mix of data showing lower inflation pressures from wholesalers, smaller gains in factory output and an improvement in foreign capital inflows to the US.