The dollar fell on Thursday after comments by Federal Reserve Chief Ben Bernanke echoed a statement made earlier this week signaling that the Federal Reserve would continue to cut interest rates, reducing the attractiveness of deposits in the currency.

Bernanke told U.S. lawmakers in Washington today that the economic outlook has worsened. He added that he would back the implementation of a quickly applied fiscal stimulus package to complement the Fed's money policy decisions.

The dollar fell earlier in the day after brokerage Merrill Lynch reported a worse than expected loss nearly $10 billion and mortgage related write downs worth more than $14 billion.

The dollar fell to 106.55 yen per dollar, approaching its two-year low. The currency reached $1.4644 versus the euro.