Germany and Italy have entered recessions (two quarter of negative GDP) a weak dollar will exacerbate their problem (Germany is a strong exporter). The market is simply stating the obvious, the dollar needs to get stronger to help Europe out of its economic problems. Unless the feds can persuade the ECB to remove to constraints set on "old Europe" to fiscally stimulate their economies (the ECB will not stimulate monetarily, only accommodate existing growth with appropriate growth in money), the only other tool left is strengthen the dollar so old Europe" can export more.
Stopping the dollar rise is very important here, both for corporate profits and for the overall economy.
on the other hand, there's already been a warning that japan might be intervening here to stop the rise of the yen. (or is that what we're now seeing? ... no i guess not, those moves are generally well publicized.)
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