Dollar strength – DXY up 1.8% and near highs of the day - the dollar had been heavily for sale/shorted into the FOMC meeting $UUP

Dollar strength – DXY up 1.8% and near highs of the day - the dollar had been heavily for sale/shorted into the FOMC meeting on Tues and the final decision to reinvest MBS has prompted a global short-covering trade.  The DXY is now up more than 1.7% today.  Carry trades are being unwound on reduced growth expectations, something that is boosting the funding currencies (DXY, JPY) and hurting others (EUR, GBP, etc).  There is also the thinking that the Fed may be early on policy (i.e. the world’s other major central banks will follow the FOMC w/incremental accommodation measures in the coming months).  For the yen, it actually traded under 85 today vs. the US$ (hit 84.73) but has now weakened back to about the flat line (there continues to be a ton of market talk that 85 is the limit that Japanese officials will bear before intervening in the market; CNBC just reported that Japanese officials are conducting an emergency survey of exporters to gauge the damage being incurred from the yen