Merkel vs. Obama - A Game of He Said She Said

Last week, a rumor supposedly leaked from a French government representative indicated President Obama said that the current strength of the dollar was problematic. The dollar weakened on the news, which would serve the U.S. Federal Reserve’s ability to begin its monetary tightening plans; that in turn serves the economy long-term. The President had to deny ever saying it, given its unpatriotic connotations, but I’m sure many market players still believe he said it; and it has impacted the dollar in my view. This morning in Germany, it seems the German Chancellor fired a salvo back onto the currency battlefield. Angela Merkel said a strong euro was not a good thing for nations on the periphery of the eurozone economy. In speaking on the euro and in sharing her indicated preference for current weakness, the dollar recovered some of that previously lost ground and the battle was balanced again in the stealth currency war between trading partners. Though working now into the late Friday afternoon, the dollar is back near where it started the day. See my report He Said She Said. Article interests ProShares Ultra Short Euro (NYSE: EUO), CurrencyShares Euro (NYSE: FXE), PowerShares DB US Dollar Bull (NYSE: UUP), PowerShares US Dollar Bear (NYSE: UDN). 

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