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The dollar fluctuated against the yen as Federal Reserve Bank of Atlanta President Dennis Lockhart said the U.S. economic recovery faces headwinds, encouraging speculation the central bank will keep borrowing costs low.
The dollar slid versus the euro on April 1 after New York Fed President William C. Dudley said the recovery is “still tenuous,” disagreeing with colleagues who said the central bank should curtail purchases of U.S. debt.
The euro fell on concern an increase in interest rates by the European Central Bank will hurt the economies of the region’s most-indebted nations.
The euro appreciated 3.5% in the first quarter. It was the best three-month performance since the shared currency began trading in 1999.
ECB President Jean-Claude Trichet surprised investors on March 3, when he signaled that policy makers may raise interest rates at their next meeting to curb consumer-price inflation, which reached a two-year high of 2.6% in March.
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