Bernanke Gets a Scolding and Sends the Dollar Soaring
Campaign season came to Congress during the Fed chairman's testimony, but you wouldn't know it from the dollar.
Testifying before Congress is never easy, but Federal Reserve Chairman Ben Bernanke came in for more than the usual share of haranguing today, even as his comments lifted the dollar.
When Bernanke said that the economic recovery continues and that he saw no immediate need for another round of quantitative easing, dollar buyers were off to the races. But even as the dollar was lifting, the Fed chairman was confronted by Senator Ron Paul, who has made abolishing the Fed a key part of his Presidential campaign.
Paul, brandishing a silver eagle, told Bernanke that "the record of what you've done is destroy the currency."
Unfortunately, dollar buyers didn't get the memo: the dollar index rose roughly 0.5% on the Congressional testimony.
"This morning's U.S. economic reports were encouraging," says Kathy Lien, director of currency research at GFT. "As long as these improvements continue, the Federal Reserve will refrain from implementing QE3 , a last ditch effort that they will not execute readily."
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