Case Study: Speeches vs. Economic Data

It was expected that Henry Paulson's speaking at Senate would be dollar-supportive even when it is about a rescue plan for the two US home loan lenders, Freddie Mac and Fannie Mea.

Almost at the same time, 8:30 EDT, Fed's Plosser was to give speech on US economy. He said the interest rates should be raised "sooner than later" to fight inflation. It was not surprise knowing that he voted against lowering rates in recent FOMC meetings.

All worked in favor of dollar despite weak economic data from contraction in Richmond Fed Manufacturing Index or falling House Price Index.