Can someone please explain the logic behind today's events?

T

The Kin

The fed pumps $200 billion more into the system and the dollar soars! I can understand a rally in stocks. But how the hell does the dollar go up? Why the hell would anyone trade in their currency for a USD dollar bill. What can it buy -- outside of a McDonalds double cheeseburger.

I'm so terribly confused right now. The fed has essentially discovered a way to make wealth out of thin air: just announce a doubling of the TAF! Fed gives banks another $200 billion and dollar goes up. IT MAKES NO FUCKING SENSE E&$%SRAY*UIGFIBOJPKLSDKJOIUD
 
the dollar soared because w/ today's Fed Action it removed pressure on the intrest rate arena. ie, the market feels that the fed can now do other things to help out the credit crisis w/o reducing rates.

so euro profit takers come in and sell sell sell. also ecb getting brearish.
 
Quote from The Kin:

The fed pumps $200 billion more into the system and the dollar soars! I can understand a rally in stocks. But how the hell does the dollar go up? Why the hell would anyone trade in their currency for a USD dollar bill. What can it buy -- outside of a McDonalds double cheeseburger.

I'm so terribly confused right now. The fed has essentially discovered a way to make wealth out of thin air: just announce a doubling of the TAF! Fed gives banks another $200 billion and dollar goes up. IT MAKES NO FUCKING SENSE E&$%SRAY*UIGFIBOJPKLSDKJOIUD
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The odds for a rate cut have fallen with this action by the Fed. That is providing a little stability and bounce to the dollar.
 
Quote from itcanbedone:

the dollar soared because w/ today's Fed Action it removed pressure on the interest rate arena. ie, the market feels that the fed can now do other things to help out the credit crisis w/o reducing rates.

so euro profit takers come in and sell sell sell. also ecb getting brearish.
More...

Exactly.
 
Quote from The Kin:

The fed pumps $200 billion more into the system and the dollar soars! I can understand a rally in stocks. But how the hell does the dollar go up? Why the hell would anyone trade in their currency for a USD dollar bill. What can it buy -- outside of a McDonalds double cheeseburger.

I'm so terribly confused right now. The fed has essentially discovered a way to make wealth out of thin air: just announce a doubling of the TAF! Fed gives banks another $200 billion and dollar goes up. IT MAKES NO FUCKING SENSE E&$%SRAY*UIGFIBOJPKLSDKJOIUD
More...

because were still in a bull market which began on October of 2002. Unless the Spooz closes below 1252 we're still in a bull market.
 
Must be a confidence thing also, im sure one of the reason the dollar have been under intense pressure lately is the unwinding of various carry trades. When stocks or whatever that was financed with these carry trades soars it takes pressure away.
 
Well shit if it's that easy. Set rates where they need to be to flight inflation and do TAF auctions as needed.

C'mon, this has to got to be inflationary, especially at these low rates. If this voodoo Fed magic works, Ben Bernanke is going to go down as the greatest economist in U.S. History.
 
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