U.S. Dollar: Fed Speaks the Truth

Currency markets completed a volatile day after Ben Bernanke indicated that discount rates could rise faster than expected. The Fed chairman’s comments immediately pushed the dollar higher. However, much of his influence faded by afternoon trading. Commodity currencies weathered the storm relatively well with slight declines in the aussie and kiwi and significant strength in the loonie. However, the biggest loser of the day is by far the British Pound on signs that the BoE might consider adding to asset purchases after all.