Dollar Fall Stops With New FED Support

The FED finally came out of his shell today and said they are ready to tighten monetary policy once the economy improves.  Once the economy improves?  Hasn’t Ben been telling us how great everything is for the past 3 months? Regardless, the Dollar Index, which tracks the currency against six U.S. trading partners, recovered from a 14-month low after the yen dropped against all but three of the 16 most-traded currencies after Japan’s machinery orders gained less than forecast.

The US Dollar ignored gains on Asian stock exchanges, rebounding against the spectrum of major currencies after Fed chairman Ben Bernanke said the Fed was ready to “tighten” monetary policy once the economy improves.

Key Overnight Developments

• Bernanke Says Fed is Ready to “Tighten” Policy as Economy Improves
• US Dollar Ignores Stock Gains, Rebounds Against Major Currencies
Critical Levels

The Euro sold off in overnight trading, slipping as much as 0.6% against the US Dollar. The British Pound followed the single currency lower, testing as low as 1.60 against the greenback. Curiously, the Dollar rebounded against the spectrum of major currencies despite gains on Asian stock exchanges that would have been expected to weigh on the safety-correlated US unit.