Link: http://skitcherz.com/blog//blog6.php/2011/01/06/europe-hates-our-economy-stock-prices

I've just read that my hypothetical scenario about the Fed behaving like a business is unlikely in the opinion of forex analysts. Valuation of the dollar is also due to a perceived increase in the strength of our own economy. Since that is what the Fed actually makes decisions on (unlike demand for dollars as in my hypothetical), the Fed will likely NOT feel the need to print more money even if Euro holders keep buying dollars. In fact, that would mean at that point that long dollar positions would probably fair pretty well.

Links:
Euro Tumbles On US Economic Recovery, Euro-Zone Troubles
Dollar Rallies Beyond $1.30 Against Euro for First Time in Month
Dollar rises to two-week high after jobless claims
Euro Sinks Against Dollar Amid US Economic Optimism