Late European session the dollar index was 0

Yesterday, the market digested the words spoken Monday by the pattern of the US Federal Reserve (Fed). It is expressed on the dollar, while the subject is rather reserved to the Treasury. Ben Bernanke has made an ambiguous speech, recalling one side than the "rates remain low for an extended period", and asserting, on the other, support a "strong dollar". "The important point about its intervention is that it has validated the concept that a weak dollar may have inflationary effects, via an inflation of the prices of raw materials", argues David Deddouche, in Société Générale. In other words, to meet its dual objective of support for employment and the stability of prices, the Fed monitors at the same time the evolution of the exchange rate and that of oil prices. Soon after these words, the greenback rose Monday, before fall. Yesterday, it was forces. Late European session, the dollar index was 0.72, to 75,43, and the euro slipped by 0.73, to 1,4847 dollar.

This rebound suggests that currency traders believe the possibility of intervention by the US authorities to support their currency Opinion is divided. "Bernanke speech suggests in effect that the Fed and Treasury have the will to set a low limit on the value of the dollar", says David Deddouche. In this way, the United States would respond to criticism of their role in the development of strategies of "carry trade" (1) in dollars, which concerned Trump value of high-yield assets in other countries, including the emerging. "It is true that it is unusual to see the Fed to take the subject, but we believe that the American authorities are actually satisfied the weakness of the dollar, representing a further economic stimulus," says Tom Levinson, at ING.

Movement of standardization

At this stage, experts agree that there is no change in the trend expected soon on the dollar. Neither severe unwinding of "carry trades", which the extent remains unknown and probably less than what these strategies were before the crisis, when the volatility was low. Valerie Perez, in Deutsche Bank, said that the greenback could slip up to 1.55 dollar against euro by the end of the year, which would lead it to be undervalued by 35.

Two elements have also been important yesterday. The Federal Reserve has for the first time taken the initiative to remove one of the non-conventional measures deployed since the beginning of the crisis. It has reduced the maximum maturity offered to owners of discount, used by banks to obtain emergency loans. "It is a first movement of standards outside the extinction of the program of quantitative easing," explains Jean-Louis Mourier, at Aurel. In addition, Janet Yellen, Member voting for the American Central Bank, said that "the US could not conduct an accommodating policy too long".Statements which were contrary to the idea of maintaining low rates long... Back once the concert of words of central bankers, the Exchange, including parity entering, should again be guided by the awareness of the risk and follow the movements of the markets.