The dollar soared to a two-year high after the minutes to the most recent Federal Reserve meeting were released this afternoon. The reason being is that the Fed didn’t specifically detail plans for another round of Quantitative Easing (QE). QE is more artificial stimulus. More stimulus is generally considered to de-value the currency. So without it…voila, the U.S. dollar rises.
However, this sudden rise in the dollar is nothing more than a trade. Nobody can truly believe that the Fed won’t dip into it’s arsenal of QE-related stimulus if the economy shows further signs of weakness? They’re simply keeping their powder dry in case economic reports and the global economy deteriorates more.