Dollar bulls remain in control with the greenback rising to 3 month highs against the euro and 2 month highs against the British pound and Australian dollar. Traders across the globe are reacting to the more upbeat and hawkish tone from the Federal Reserve by selling equities, selling gold and buying dollars. The only mismatch is in bonds with Treasury yields falling across the board.

Risk aversion is also helping the dollar as Greece's problems prove to be only the tip of the iceberg for the Eurozone. This morning, Standard & Poor's announced plans to reevaluate the ratings of more than 1.46 trillion euros of covered bonds. Lower ratings would deal a further blow to the attractiveness of euro denominated assets.

Philly Fed and Leading Indicators Beat, Jobless Claims Disappoint

Meanwhile, stronger than expected manufacturing activity in the Philadelphia region offsets the decline in manufacturing activity in the Empire State. The Philadelphia Fed survey rose to the highest level since Feb 2005, which suggests that manufacturing sector is still chugging along. Leading indicators also rose by 0.9 percent thanks to an improvement in jobless claims, average workweek, building permits and consumer expectations. The only dark cloud in this morning's report were jobless claims which increased for the second week in a row. Weekly claims rose from 473k to 480k while continuing claims rose from 5.181M to 5.186M. Since the first 2 weeks of the month are survey weeks for non-farm payrolls, there is a good chance that the U.S. economy endured net job losses last month. Dollar bulls may have to wait until January for positive job growth to return.
Bernanke Vote

Finally, the Senate Banking Committee is set to vote on Bernanke's confirmation today. Ultimately he will be confirmed for another term as Fed Chairman but not before a round of heated debate between Senators on the effectiveness of his leadership.