US Dollar Exchange Rate Yesterday was a cracker for the US dollar exchange rate. The currency had a very good day thanks to news out of Europe. Indeed, the safe haven status of the currency continues to draw capital even as global equity markets rise. The US dollar has benefited at the expense of the Swiss Franc and the Yen, which also have safe-haven currency status, but the governments of these countries continue to hold in control an increase in the national currencies after their significant rise in price. The minutes from this month's FOMC rate announcement showed that a few policy makers favoured more aggressive action to stimulate the U.S economy. However, the Euro fell for the first time in three days against the Dollar in the build up to next week's ECB meeting. The Euro extended its losses after the European Commission said that an index of industrial and consumer sentiment fell to the lowest level since May 2010. FOMC Minutes "Most" members agreed the economic outlook had deteriorated enough to warrant a response from the Fed at this meeting. While "all" felt that monetary policy could not completely address the various economic strains, "most" felt it could "contribute importantly to better outcomes" in terms of the dual mandate. "Some" members felt additional policy accommodation was warranted given that the unemployment rate was expected to remain well above the level consistent with the Fed's mandate, while inflation was expected to be at or below. "Those viewing a shift toward more accommodative policy as appropriate generally agreed that a strengthening of the Committee's forward guidance regarding the federal funds rate, by being more explicit about the period over which the Committee expected the federal funds rate to remain exceptionally low, would be a measured response to the deterioration in the outlook over the inter meeting period."

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