"Since the primary global economic problem is a lack of what is known as aggregate demand, central banks everywhere will continue to remedy the affliction by keeping real short rates low," Gross writes. "Low short yields help stimulate demand by creating gradually rising inflation, and nurturing capital gains in equity, real estate, (and yes) bond markets. In addition, the highly levered U.S. consumer and their main conduit � mortgage debt � require low short rates just to keep their heads above water. Thirdly, with the Fed now implicitly on board in support of adjusting our balance of payments deficit via a depreciating currency (and a reduced deficit), low real short rates are the monetary policy tool of necessity."
At risk of sounding repetitive and stupidly bullish, I would not put too much significance on the intra-day movements of comex trading. The low 400's has very solid support, but I still don't think it will be used. I think the $ is in a short lived short covering and manipulated surge.
There were a lot of comments from the BOJ just before new years' that they were "monitoring" the US$ weakness and seemed to warn they would intervene. It is only up because they would not accept the way it ended last year and the way it seemed to want to start this year.
Me - I've got my head back in the Ostrich hole so they get to see my ass again.