What's happening in dollars is partly that the Treasury is auctioning off huge quantities of CMBs (= Cash Management Bills, or 'we're out of cash bills'). These are short term instruments with a high yield that are attractive to foreign central banks. But to buy them the FCBs have to convert their own currencies into dollars, which causes upward pressure.

The current market is being driven by massive, contradictory forces. Deflation fears are sending commodity, oil and gold prices down, which are driving the markets up. The US govt issuing CMBs is a big warning sign about the US govt's finances. At some point FCBs will stop buying them, at which point the Fed has to step in and buy them instead, which is a pure dollar printing press move, and highly inflationary.

From a technical point of view I think what this means is that we are likely to see more and more volatility, with extreme price movements becoming a norm. To be honest, it's not a market I feel comfortable trading in any more. If the deflationary pressures are real, cash may turn out to be the best place to be (and short commodities and shiny stuff).