The dollar was up this morning on the back of comments by the recently-installed chairman of the US Federal Reserve Bank, Ben Bernanke.

A short time ago the dollar was up slightly at 1.2148 against the euro and 1.7498 against the pound.

The US Federal Reserve has been raising interest rates steadily in a bid to fight off inflationary pressures during a sustained period of economic growth.

Mr Bernanke, while seen in some quarters as less hawkish than his predecessor, has said on a number of occasions that the recent trend of rate rises might yet continue.

A speech made yesterday in New York is being interpreted as a further indication that there will be more increases in the base rate of borrowing.

"Bernanke sounded quite hawkish," Societe Generale analyst Niels Christensen told the Bloomberg news agency.

"The market thinks higher rates will continue to support the dollar for a bit longer.''
 
US interest rates are currently 4.5 per cent, the same level as the base rate of borrowing in the UK.