The euro was slightly lower against the dollar on Friday after rising the previous day as the European Central Bank sounded a hawkish note on interest rates and the U.S. Federal Reserve signaled more cuts, according to AP. The 15-nation euro bought US$1.4788 in afternoon European trading, a little below the US$1.4793 it bought in New York late Thursday after Fed Chairman Ben Bernanke said the U.S. bank would act aggressively in confronting economic woes. The British pound dropped to US$1.9557 after the Bank of England kept its own rate unchanged, but signaled a cut was likely in February. That was down from the US$1.9609 it bought late Thursday. Bernanke's comments came after the Bank of England and the European Central Bank kept their own benchmark refinancing rates unchanged at 5.25 percent and 4 percent respectively, but remained split between the opposing challenges of higher inflation and worries about economic growth. Higher rates, used to combat inflation, also can strengthen a currency, and the euro's near-record strength has raised concern among businesses and politicians about the competitiveness of European exports. On Friday, the U.S. Commerce Department reported that the country's trade deficit surged to the highest level in 14 months in November, reflecting record imports of foreign oil. The deficit with China declined slightly while the weak dollar boosted exports to another record high. In other trading, the dollar was down to 108.98 Japanese yen from 109.54 yen.
