Bernanke: Dollar will reflect economic strength

WASHINGTON (Reuters) - Federal Reserve Chairman Ben Bernanke said on Thursday the U.S. dollar will reflect the strength of the U.S. economy over the medium term.

"We need to make this economy strong and have price stability. If we do that, then in the medium term the dollar will reflect the strength of the U.S. economy," Bernanke told the House of Representatives Budget Committee.

The dollar lost value against a basket of world currencies on Thursday, and has fallen sharply in recent months as investors worry about the rising risk of a U.S. recession and prospects for deeper interest rate cuts.

(Reporting by Emily Kaiser; Editing by James Dalgleish)