Dollar Bouncing Today in Forex Trading

Greenback heads higher in currency trading
The dollar is bouncing today in forex trading today on the currency market. After the risk trade made an appearance yesterday, the dollar is heading higher.
One of the main reasons for the greenback’s rise in currency trading is the fact that Fed chair Ben Bernanke has hinted that an exit strategy from economic stimulus measures are likely on the way. GFT’s Boris Schlossberg reports in FX360 on the effect of Bernanke’s remarks:

Although the Fed chief’s comments broke no new ground, the mildly hawkish tone of the message prompted a short covering rally especially in USD/JPY which spiked to 89.40 on fears that US rates may begin to rise sooner than the market expected sabotaging the dollar carry trade.

It appears that, for now, the dollar carry trade is off. However, it could come back into favor if the Fed is slow to exit from economic stimulus, and if the risk trade regains popularity.