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06/08/2008 - Fed attempts to bolster USD, ECB flummoxes

Posted by FOREX.com's Weekly Strategy in June 6th 2008  
* Fed attempts to bolster USD, ECB flummoxes
* May NFP reveals the glass is half empty
* Bank of Canada rate decision on Tuesday
* Update from Downunder (AUD & NZD)
* Key data and events to watch next week

The new month got off to a rollicking start (yes, I'm being sarcastic) with Fed Chair Bernanke on Tuesday addressing USD weakness in prepared remarks to the International Monetary Conference. Bernanke explicitly noted that the Fed, "in collaboration with our colleagues at the Treasury," was carefully monitoring currency markets, the important points being that Treasury was included and that the weak USD was on the Fed's radar screen. Bernanke noted that USD weakness had an impact on inflation and inflation expectations and voiced a preference for a "strong and stable dollar." His remarks caught the market off guard, but his message was ultimately deemed to be potentially significant by many market participants and a USD buying spree ensued. By early Thursday morning, the USD was on the verge of breaking higher, with the USD index breaking up over trendline resistance dating back to last August, and higher out of the Ichimoku cloud. But the moves were not to last.  Full text »

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