Somebody is relieved about the "stress test" results; that, and the "less horrible" unemployment report may have catalyzed another 2% squirt up in the US equity markets. Financials were up another 7% as a group.
Sadly, those US Dollars in our pockets and bank accounts, which denominate our stocks and bonds, lost a couple percent today; some say that with the recent near-failure of a Treasury auction this week, and the rise in long-term interest rates, the Fed will be forced to start buying lots of Treasury Bonds (quantitative easing).
Quantitative easing is like a secondary stock offering: it's dilutive. What's diluted is the value of the US Dollar. The market expects the Fed to start backing up the truck to buy bonds; hence the sell-off in the dollar. Of course, a sell-off in the dollar means commodities denominated in dollars become more expensive.
Wondering about: XLF