US Federal Reserve chairman Ben Bernanke said high unemployment and low inflation point to a need for a further easing of US monetary policy, but said policymakers were still weighing how aggressive they should be.
"There would appear - all else being equal - to be a case for further action," Mr Bernanke said in remarks prepared for delivery to a conference sponsored by the Boston Federal Reserve Bank.
Mr Bernanke said a prolonged period of high unemployment could pose a risk to the recovery's sustainability and said the low level of inflation meant the risk of a dangerous downward slide in prices was greater than desirable.
Recriminations over currencies reverberated across Asia today ahead of Mr Bernanke's speech.
Beijing kept up the heat on the United States, saying Washington should not make China a scapegoat for its own problems by constantly pressing for a swifter rise in the yuan.
Speaking earlier today Commerce Ministry spokesman Yao Jian said it was not fair to criticise Beijing's exchange rate policy simply by pointing to China's trade surplus.
"Other countries have no right to comment on what is a reasonable level for a country's trade surplus," Mr Yao told a monthly news conference.
US data yesterday showed America's trade deficit with China swelled to a record high of $28 billion in August - grist to the mill of US politicians who say that China keeps the yuan artificially cheap to help its exporters.
China's central bank let the yuan edge up today to 6.6438 per dollar, the highest level since it abandoned a peg to the dollar in July 2005, but US critics say it is still 20 per cent or more undervalued.
Sniping over what exchange rates are appropriate to put the world economy back on course for more balanced growth is intensifying ahead of a pair meetings of the Group of 20 leading economies in South Korea.
Finance ministers meet next week in Gyeongju to prepare for a summit of G20 leaders in Seoul on November 11-12th.
Reuters