Dollar shaken as voodoo economics continues

Who believes this stuff anymore, huh? Apparently not the currency markets:

The dollar trimmed its rally late in U.S. trading Tuesday and continued to trade defensively overnight after U.S. Treasury Secretary John Snow told lawmakers that tax cuts were key to economic vibrancy.

Snow will return to Capitol Hill at 10 a.m. Eastern Wednesday.

Snow's assertion that higher taxes are not the way to cut the deficit and his commitment to permanent tax cuts appeared to undermine confidence in the administration's determination to cut the fiscal deficit, said analysts at ABN Amro in a research note.