The Federal Reserve Chairman is chatting up the dollar these days. On two separate occasions this week, Ben Bernanke made some extraordinary comments about inflation and the greenback. Extraordinary, that is, for a sitting Fed chairman.
Typically, the tired remarks about a strong dollar being in the best interests of the U.S. are dispatched by the Treasury Secretary—a view that’s summarily dismissed by forex traders largely because it’s been made so often over the years that it’s lost any real meaning. But when the Fed chairman speaks of the buck with a bullish view, well, that’s something else entirely. Unsurprisingly, the foreign exchange market is paying attention.