Forex - Dollar gains on Bernanke comments, output data, G20 language

The dollar rose against most major currencies on Friday after Federal Reserve Chairman Ben Bernanke said that despite high unemployment rates, the U.S. economy was improving.

Talk a G20 summit won't end with warnings for member nations not to devalue their currencies pushed the greenback as did soft industrial production figures.

In U.S. trading on Friday, EUR/USD was down 0.06% at 1.3356.

A G20 summit is underway in Moscow, and talk that the final draft of the meeting will not involve accusations of devaluations taking place in Japan and in other countries where currencies have been weakening fueled dollar demand.

The yen rose on recent fears Japan may be accused of tinkering with its exchange rate to weaken it, though talk that G20 ministers remain comfortable with exchange rates today allowed the yen to continue its slide, which sent the dollar gaining.

The dollar also saw demand after Federal Reserve Chairman Ben Bernanke told G20 finance ministers and central bankers earlier that while unemployment rates remain high in the U.S., the economy is improving.

The news sent the greenback rising on sentiment the Fed may be closer to considering winding down its USD85 billion monthly bond-buying program, a monetary stimulus tool that weakens the dollar to spur recovery and job demand.

Soft activity in U.S. mines, utilities and factories fueled dollar demand as well.

Official data showed that U.S. industrial production slipped 0.1% in January, missing expectations for a 0.2% rise after a 0.4% increase the previous month.

Elsewhere in the U.S., economic indicators came in solid.
In a preliminary report, the University of Michigan said that its index of consumer sentiment rose to 76.3 in February from 73.8 the previous month, well above expectations for a rise to 74.8. 

Meanwhile, the Federal Reserve Bank of New York reported that its index of manufacturing activity beat expectations in February, rising to 10.0 from a reading of -7.8 the previous month. 

Analysts had expected the index to improve to -2 this month.

The greenback, meanwhile, was down against the pound, with GBP/USDtrading up 0.13% at 1.5512.

The dollar firmed against the yen, with USD/JPY trading up 0.57% at 93.40 and rose against the Swiss franc, with USD/CHF trading up 0.12% at 0.9223.

The dollar was up against its cousins in Canada, Australia and New Zealand, with USD/CAD up 0.61% at 1.0071, AUD/USD down 0.63% at 1.0295 and NZD/USD trading down 0.76% at 0.8446.

The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was up 0.12% at 80.57.