Money Markets: ‘Duh, Which way should we go?’

Bernanke has even the brightest investors scratching their heads over his latest clueless remarks.

The dollar remained under pressure Tuesday as investors continued to digest CNBC's report on Federal Reserve Chairman Ben Bernanke's comments and awaited his Wednesday speech for moreclues on the U.S. interest-rate outlook.

One can only hope that they choke on the next report.

With little U.S. data on the calendar today, "trading may well stall at the spike highs made yesterday morning before news of Ben Bernanke's change of tone caused the market to buy back dollars," said Boris Schlossberg, senior currency strategist at FXCM.

What an extraordinarily efficient way to run markets!

The dollar rebounded from a one-year low against the euro late Monday after CNBC anchor Maria Bartiromo said the Fed chief told her that the media and the markets had misinterpreted his words last week as a signal that the central bank would pause after one more rate rise. Bernanke also reportedly said he regretted that anyone in the financial markets would view him as dovish.

Last Thursday, Bernanke told the congressional Joint Economic Committee that the Federal Open Market Committee, the Fed's policy panel, would pause at some point to assess the impact of its steady stream of rate increases even if inflation risks remain. He also said, however, that a pause did not mean further rate rises were out of the question.

"He's backtracking his past statement and he's trying to clarify through the media, which makes him look a little bit less credible. If you have a Federal Reserve Board chairman that looks less credible, that could be considered dollar-negative," said Malpede.

Uh, pardon me. But, it's impossible for Bernanke to look less credible than he already is.

Analysts at ABN Amro said the "reaction looks overdone" since Bernanke was "pretty clear" in his testimony that "the Fed pause was just a pause and the next moves would be data-driven."

That should shatter any hopes you have left in the "wisdom" of free markets.