Another volatile day has hit the equity markets which has led to sharp moves in currencies.

With the exception of producer prices, there is an expectation of more dollar bearish news, and currency strategists would actually be surprised if Bernanke had anything positive to say about the US economy.

The US dollar sold off aggressively following the release of a much weaker than expected manufacturing survey.

The US dollar was firm ahead of the NY open, but reversed all of its gains by the end of the US session.

The dollar has indeed started the week on firmer footing. The main reason why the dollar is putting up a good fight is because the market is trying to figure out what is more important, yield or growth.

A stronger than expected CPI number could drive the dollar higher, especially since it will be the first major release from US.

Federal Reserve Chairman Ben Bernanke expressed concern that the weakness of the labor market will pressure consumer spending going forward. As a result, the Federal Reserve will be lowering their projections for US growth next week.

The US dollar continued to rebound as consumer spending snapped back in the month of January, and tomorrow the dollar’s momentum may continue with the trade balance due for release.

Warren Buffet announced a plan in which Berkshire Hathaway will be stepping in to cover the liabilities of $800 billion in municipal bonds.

There is nothing that the US Federal Reserve can do or say at the present time to surprise currency traders.