Greenback Strengthens as Fed’s Bullard Says “Recovery is on Track”

The U.S. employment sector remains “weak” but inflation expectations are rising, St. Louis Fed President James Bullard said on Thursday evening EST. Addressing an event in Memphis, Tennessee, Bullard, who votes on the FOMC this year, said, however, that “the housing sector is stabilizing” and financial markets have strengthened from their levels at the end of 2008. “The economic recovery is on track,” concluded the central banker. Focusing on recent proposals by Congress to change the Fed’s structure, Bullard said, “Allowing short-term politics to mix too closely with monetary policy leads to poor economic outcomes.” He said the industrialized world had seen this happen “frequently” in the last 50 years. Following Bullard’s comments, which suggest that the U.S. economic recovery is coalescing and inflation is a future threat, the greenback strengthened. EUR/USD fell by 20 pips to reach $1.3473USD. Nonetheless, the pair remained safely above its intraday low of $1.3444USD, reached in the aftermath of the Fed’s discount rate hike about four hours ago. Support for the pair lies down at $1.3424USD, hit all the way back on May 18, while, beyond that, it lies down at $1.3247USD, touched on May 6.