FOREX and DOLLAR US

SYDNEY (Thomson Financial) - The US dollar was higher against the yen and euro early in Asian trading hours Friday, but still within familiar ranges, after Federal Reserve chairman Ben Bernanke concluded Thursday his semi-annual testimony to the US Congress.

Bernanke reiterated that the Fed's main concern was inflation and that weakness in the housing market in the US would be a drag on economic growth, but his remarks failed to shake the currency markets.

At 10.18 am here (0018 GMT), the dollar was at 122.15 yen, up from 122.01 yen in late trading in New York Thursday. The euro was at 1.3801 dollars, down from 1.3804 in New York.

The carry trade has been boosted by data released Thursday showing the Chinese economy expanded by 11.9 percent in the second quarter, growing at a faster rate than the 11.0 percent forecast by the market and the 11.1 percent recorded in the first quarter.

This helped the Australian dollar reach a new 18-year high of 0.8810 US dollars in New York trading.

The Australian dollar is also at its highest levels against the yen since the early 1990s.

NAB Capital said the Australian dollar had also been boosted by the higher prices for industrial metals.

'We note that the Australian-US dollar pair still looks quite undervalued relative to commodity prices, despite its strong run-up this year,' NAB Capital said.

'Even a further rise to 0.8950 US dollars, where it briefly traded in February 1989, would still leave quite a large gap with the current level of commodity prices.'