Bernanke Says Dollar Weakness Related to Unwinding of Flight to Safety Trade
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On dollar weakness, Bernanke says:
"Well, the dollar fluctuates. One factor, for example, that has caused fluctuations have been quite extreme during the crisis has been the safe haven effect. For example, during the height of the crisis in the fall of 2008, money flowed in to the treasury market and drove up the value of the dollar substantially, reflecting the fact that U.S. capital markets are the deepest and most liquid in the world. A lot of what you have seen over the last couple of years has been the unwinding of that as the economy strengthened and uncertainty has been reduced."
"Well, the dollar fluctuates. One factor, for example, that has caused fluctuations have been quite extreme during the crisis has been the safe haven effect. For example, during the height of the crisis in the fall of 2008, money flowed in to the treasury market and drove up the value of the dollar substantially, reflecting the fact that U.S. capital markets are the deepest and most liquid in the world. A lot of what you have seen over the last couple of years has been the unwinding of that as the economy strengthened and uncertainty has been reduced."
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