Overall, in the short term this is not going to deter the Fed from continuing its measured rate tightening campaign,
At the end of the day, this is not going to change the view that the U.S. economy is in good shape. Not going to provide any much insight as to how much the Fed has to go. So it hasn't had much of an impact on the dollar.
Fed speakers have been on message, and the belief is that U.S. yields will continue to improve relative to Europe, the UK and Japan, and that will continue to underpin the dollar,
The Fed remains concerned about the inflationary effects of high oil prices and that is going to keep it on a measured rate hiking path. In the near term, I think that is supportive for the U.S. currency.
But I do think it brings into question the notion of how aggressive the Fed is going to need to be in terms of raising rates in 2006.