Bernanke Remarks Buoy Dollar

by Darren

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Remarks by Fed Chairman Ben Bernanke helped to lift the U.S. dollar to a two week high. Investors have been extremely nervous about fuel costs, and the negative effect high gas prices have on the economy. They feared that if the Fed were to continue cutting interest rates, chances were becoming greater that inflation would spiral out of control. Bernanke made it clear that he was “attentive” to the investor’s concern.

“It could be a turning point for the dollar,” said Michael Woolfolk, senior currency strategist in New York at Bank of New York Mellon. “It’s very unusual for a sitting Fed chairman to talk about the dollar explicitly.’”

In fact, the dollar did rise to a two week high against the Euro and the Yen. Analysts seemed to be happy about what Bernanke said, but were still remaining cautious about over optimism. The dollar has faced a lengthy and brutal decline. Is this the start of the road back up or just a false start?

We’ll know more in the next few weeks, as investors react.

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