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Dollar uptrend intact, ignore any day to day move for now

Posted by WorldWideMarkets . on May 23, 2013 3:29:00 AM

Ben BernankeThe dollar up trend remains intact after Fed Chairman Ben Bernanke’s testimony to Congress. Though the dollar sold off a little this week, it didn’t take long for investors to zoom in on the thought he and the other governors may be mulling an exit from QE. It was then off to the upside for the dollar against every other major. As has been repeated everywhere, the prepared remarks began with monetary stimulus is helping the U.S. economy recover but the U.S. central bank needs to see more growth before they would contemplate tapering off their bond buys. But then there was inkling the Fed was looking further ahead with comments about low interest rates for too long could have costs and risks. The nail was in the Q&A when he said the Fed policy committee could decide in the “next few meetings” to scale back its bond buying. Stocks in the U.S. and Europe fell, U.S. bond prices dropped, gold erased gains, while the dollar tore through stops and technical levels to the upside. Crude fell but on higher gasoline stockpiles rather than anything Bernanke said. Which leaves the dollar as the first investment choice in currencies for most players and though volumes rose after Bernanke concluded his statements, it appears more cash sits on the sidelines waiting to buy on dips.

 

 

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