Dollar Strength Buoyed By More Fed ‘Tough Talk’ — Market Talk

The greenback’s upward momentum rolls on as the US dollar index rises 0.5% hitting a new 20-year high. The dollar gains 0.8% against the euro and is little changed against the yen. The dollar’s strength is mostly due to the fact that the Federal Reserve remains hawkish says Peter Cardillo, Chief Market Economist at Spartan Capital Securities. “There was more tough talk from the Fed today. The Fed minutes alluded to the fact that the Fed is going to remain aggressive with regard to rates,” he says. Cardillo also believes another reason for dollar strength is that the US economy will be able to withstand recession better than other countries and that has “investors pouring their money into US dollars.”