jean claude trichet

European Central Bank President Jean-Claude Trichet on Saturday defended central bank responses to the financial turmoil that has roiled global markets for the past year and warned the storm is not over.

Oil held near $128 a barrel Friday in Asia after rising more than $5 overnight as the dollar swooned against the euro in response to comments by the head of the European Central Bank.

The dramatic reversal in what had been a weakening market came after ECB President Jean-Claude Trichet suggested the bank could raise interest rates and the euro climbed against the dollar.

When interest rates rise in Europe, or fall in the U.S., the dollar tends to weaken against the euro. Many investors tend to buy commodities such as oil as a hedge against inflation when the dollar is falling.