Ben Bernanke, the Federal Reserve chairman, threw his support behind a strong dollar in rare comments about the currency, but it was not enough to stop the greenback dropping to a 15-month low.

Mr Bernanke said that the central bank was closely monitoring the value of the dollar, which has been hit by investors’ flight to riskier assets as the world staged an economic recovery.

He said that the Fed’s commitment to fostering high employment and stable prices, combined with the underlying strengths of the US economy, would “help ensure that the dollar is strong”.

It is rare for the Fed to comment on currency, which is overseen by the Treasury.

But Mr Bernanke also reiterated yesterday that US economic conditions warranted exceptionally low interest rates for an extended period – a comment that has been weighing on the dollar since it was first made by the Fed in September.

With the prospect of low returns on the dollar for at least six months and more likely a year, investors have been selling greenbacks to fund the purchase of higher risk assets.

Mr Bernanke’s commitment to a strong dollar helped the current briefly recover yesterday before it resumed its downward trajectory.

The US Dollar Index, which tracks the dollar against a basket of six major currencies, fell to 74.679 points, its lowest point since August 2008, while the euro moved above $1.50 and the pound was above $1.68 during the day.

Brian Kim, currency strategist at UBS, said that with even more evidence from the Fed that the low rate for here to stay, investors were increasing their risk appetites.

“Equities are steaming higher. We've got crude up $2.50 now,” he said. “So it seems like people are using that as an opportunity to keep pressing risk-seeking ideas and trades for the near term.”

The Dow Jones Industrial Average gained 1.33 per cent to 10,406.96 points while the S&P500 was up 1.45 per cent and the Nasdaq rose 1.38 per cent. Oil jumped by 3.3 per cent to $78.88 per barrel and gold rose 2 per cent to another record at $1,138.60 per ounce.

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