Shares and government bonds rose on Thursday after Federal Reserve Chairman Alan Greenspan's upbeat assessment of the U.S. economy, but foreign exchange traders saw little new in the comments and sold the dollar, Reuters reported. Oil prices declined as healthy stocks of crude and other products like heating oil eased supply concerns, despite recent disruptions caused by hurricanes in the Gulf of Mexico. Greenspan told Congress in his semi-annual testimony on Wednesday that U.S. economic growth was steady and inflation contained, an environment supportive of both safe-haven government bonds and riskier equities. However, some traders who had expected more hawkish comments from Greenspan about how far interest rates might rise were taking profits on the dollar. "Before the testimony the market was already positioned towards hawkish comments from Greenspan," said Michael Klawitter, senior currency strategist at WestLB in Duesseldorf. "In the end, the testimony was probably not hawkish beyond what the market expected so it was 'buy the rumour, sell the fact'. But the testimony was dollar-supportive, if you take out positioning." Greenspan is to appear before the Senate at 1400 GMT but is due to deliver the same speech, and analysts do not expect any fresh remarks from the subsequent question-and-answer session. The dollar was buying 112.5 yen down from 112.90 in late U.S. trade. It had climbed to a fresh 14-month high of 113.73 yen on Wednesday. The euro was up slightly at $1.2170, building on a nearly 1 percent gain on Wednesday. Sterling rose half a cent against the dollar after data showed UK retail sales grew at their fastest rate in 1-1/2 years in June, countering the argument that British rates needed to be cut aggressively. --mor 1258 Local Time 0958 GMT
