The dollar index has risen 5.1 %

At a time when foreign officials and U.S. lawmakers are criticizing the Federal Reserve plan to buy Treasury bonds, the currency market is the vote in favor of Ben S. Bernanke 's quantitative easing.

The dollar index measuring the performance of the currency against six major trading partners has risen 5.1 percent since its low this year on November 4. Futures traders reduced bets on a decline in the dollar against the euro, yen, Australian dollar and Swiss franc, the data from the Commodities Futures Trading Association in Washington show.

Leaders Chinese Premier Wen Jiabao to John Boehner, the candidate to be the next speaker of the House of Representatives, have said plan Fed chief Bernanke to print money and buy 600 billion U.S. dollars of U.S. government debt. UU. cause instability and rising inflation. The currency market millones 4000000 dollars a day, notes the Fed's strategy is unlikely to degrade the dollar as the economy continues to strengthen.

"The dollar has found a final," said Lane Newman, director of foreign exchange in New York for ING Groep NV, the largest Dutch financial services company.

Strategist forecasts for the dollar to weaken ceased. From mid-October, the average of 38 estimates was for the currency to trade at about $ 1.36 to the euro in mid-2011. It ended last week at $ 1.3673.

"Clueless" Policy

German Finance Minister, Wolfgang Schaeuble, said the policy November 05, the Fed was "no idea" and is unlikely to revive growth. Brazilian Finance Minister Guido Mantega, who used the phrase "currency war" six days after the Fed suggested in its meeting of 21 September that it was willing to ease monetary policy, said the November 4 U.S. is throwing "money from a helicopter and can cause asset bubbles to form.

Bernanke defended the decision in a speech in Frankfurt last week, saying it is the best way to support the dollar and support the global recovery. Economists at Barclays Capital said in a report of 19 November that U.S. growth will accelerate this quarter from 2.4 percent in the three months ended September 30, while the 16 euro zone nations involves "churning" in the middle of negotiations to rescue Ireland.

Ireland requested a rescue plan to help fund himself and save his bank, becoming the second member of euros to find the rescue of the European Union and the International Monetary Fund. Irish Finance Minister Brian Lenihan said the loan will be less than 100 million euros (138 billion U.S. dollars), declining to give further details at a press conference in Dublin the night.

investor concerns that Ireland may default drove up yields on 10-year bonds last week to 6.46 percentage points more than German bonds of similar maturity, a record.

As bullish

"It has become almost fashionable to criticize the Fed," despite the fiscal crisis of Europe "has changed the image a bit," said Vassili Serebriakov, currency strategist at Wells Fargo & Co. in New York.

Wells Fargo, the third currency more accurate predictor of 44 companies for the six quarters ending Sept. 30 estimated that the dollar will end the year at $ 1.38 to Europe's common currency, and increased to $ 1.34 in 2011. Last month, the company called an exchange rate of $ 1.43.

IntercontinentalExchange Inc. 's dollar index fell 0.5 percent to 78,134 from about 9:45 am today in London, falling for a fourth day. That is still below the 82,918 level on August 27, when Bernanke said the central bank will "do everything possible" to keep recovery on track. That prompted speculation that the Fed would conduct a second round of quantitative easing call and keep interest rates at historically low levels until 2011.

Open Letter

"The dollar can not mount a sustainable rally in the face of quantitative easing," said Richard Franulovich, currency strategist at Westpac Banking Corp. in New York. "The Fed is clogged the U.S. interest rates and in so doing, is making the dollar is unattractive compared to other countries with higher interest rates."

A group that includes former Republican government officials and economists wrote an open letter to Bernanke, issued Nov. 15, saying that the purchase of assets "currency debasement and inflation risk" and will not stop U.S. unemployment . UU. which has remained above 9 percent since May 2009.

The best way to support the dollar and the global recovery is through policies that lead to the resumption of robust growth in an environment of price stability in the United States, "Bernanke said in a speech in Frankfurt on November 19 . The countries that undervalue currencies can inhibit the growth of the world and the instability of financial risk in the country, he said.

Foreign demand

Treasury Department figures showed last week that global investors bought a net $ 81 billion of U.S. stocks, bonds and other financial assets in September, above average this year of $ 71 million dollars, after Bernanke outlined the plan to buy bonds from the month before central bankers in Jackson Hole, Wyoming.

During the first round of quantitative easing, the central bank bought $ 1,725,000,000,000 government bonds and mortgage between November 2008 and March 2010. In the past three years, the dollar index has ranged from a low of 70,698 in March 2008 to 89,624 in March 2009. This was the year of acquisition 88,708 in June.

Investors may prefer the dollar as the Fed's effort to avoid deflation by injecting more money into the financial system is showing signs of success. A general decline in consumer prices tends to hurt a currency because international investors have less incentive to buy assets in that country.

The yield on the benchmark 30-year Treasury, which are more sensitive to changes in expectations of rising inflation, rose last week to 4.42 percent, the highest since May.

Take Pimco

"The long end of the market is telling you to give Bernanke and his colleagues the benefit of the doubt that this can succeed," said Paul McCulley, managing director of Newport Beach, California, Pacific Investment Management Co., ie world's biggest bond fund. McCulley made the comments last week "The advantage of Hays with Kathleen Hays.

Futures traders reduced bets that the dollar will weaken against the euro. The number of contracts to hedge funds and other large speculators have on the Chicago Mercantile Exchange increased commitment to the European currency fell to 8606 from 16 November of the 48,243 high school this year on 8 October; Data Commodity Futures Trading Commission.

Traders "exceeded" the weak dollar and "now we're seeing a reversal of that," said Jeffrey Young, head of currency research at North American foreign Barclays in New York. "It makes sense that the dollar will keep up" as bond yields in the U.S. increase, he said.

Broad Rally

Discharged from the dollar index this year on November 4, legal tender of the United States has risen to 15 of its 16 widely traded counterparts. Won the majority against the Swedish crown, increased 4.2 percent, followed by 3.6 percent against the Norwegian Crown and 3.1 percent compared with the franc.

UBS AG, the currency trader's second largest behind Deutsche Bank AG, raised its forecast of a month last week for the dollar on signs of recovery in U.S. economy and persistent fiscal crisis in Europe.

The Zurich-based company believes that the strengthening dollar to $ 1.30 per euro in one month, compared with its previous estimate of $ 1.40, according to a research note dated 15 November. The U.S. currency can rise to 85 yen a month, from a previous target of 80 yen, he said. The dollar traded at 83.44 yen in London today from 83.55 yen in New York on 19 November.

"Europe's fiscal problems will continue and the U.S. economy is beginning to revive after a weak summer," analysts led by Mansoor Mohi-uddin, chief currency strategist based in Singapore at UBS, wrote in the note. "We expect investors to look more favorably on the dollar now."