Consequently, the growing chorus of policy makers for higher interest rates has led market observers to believe the Fed could tighten its monetary policy as soon as its April meeting.
”The parade of Fed speakers that we’ve seen have suggested that the Fed’s extreme dovishness was unfounded,” Mazen Issa, senior foreign-exchange strategist at TD Securities, told the WSJ. “It’s adding more fuel to the fire that perhaps the market had gone too far in one way.”
Consequently, if the Fed does decide to hike rates, the tighter monetary policy would diminish the supply of U.S. dollars floating around in the economy and help the greenback appreciate against foreign currencies.
PowerShares DB U.S. Dollar Index Bullish Fund