Salient to Investors:

The Fed’s mixed messages on monetary policy are stoking volatility in the currency market, raising the odds that companies will have a harder time setting up exchange-rate hedges designed to protect overseas earnings.

Ulrich Leuchtmann at Commerzbank said if a high-volatility environment were permanent it would cause problems when people have to roll their hedge positions.

Chris Turner at ING said stop-go monetary policy communication among some of the world’s most powerful central banks is leading to much volatility. Turner said most agree that the dollar is set for quite a decent rally.

The dollar’s strength is contributing to a projected 1.5 percent decline in Q2 earnings for non-financial companies in the S&P 500 Index. Analysts expect at least three more quarters of weakening for the yen and euro, cutting the dollar value of goods sold overseas.

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