Bank of America (NYSE:BAC) on U.S. Dollar, Euro

Bank of America Corp.'s (NYSE:BAC) head of Americas G- 10 currency strategy at Bank of America Corp. in New York, Paresh Upadhyaya, commented on the relationship of the U.S. dollar and the euro after the U.S. payrolls report, which was considered disappointing.

Upadhyaya said, “Overall, the tone for the dollar should be stronger as most of the data has been coming in on the stronger side and that funding problems still weigh on Europe.”

As for the payrolls report, Upadhyaya added “They were clearly disappointing. The market had high hopes of a strong number due to the rising employment component in the regional manufacturing surveys.

“It is mixed data and therefore the dollar’s reaction is likely to be choppy.”

Because the U.S. dollar is the reserve currency of the world, it maintains the unique position of being able to go up in value even when it is weak itself, as its relationship with the euro shows.

That's why the dollar and gold can break its usual inverse relationship at times and move up together in value.

Long term this won't help the dollar, as it continues to be flawed because of the policies of the Federal Reserve.

But it will trade up at times as the real story of weakness in the EU and by extension, the euro, continues to unfold.