* Dollar Exceptionally Volatile but Fails to Jump Start Rally
* Euro Driven by Rumor of Grand 2 Trillion Bailout, Ignores Spanish Downgrade
* British Pound: Why High CPI Hurts and What will the BoE Minutes Offer?
* Australian Dollar Recovers Alongside Equities, No Clear Trend Just Yet
* Japanese Yen Unfazed by Yet Another Rumor of Official's Plans for the Yen
* New Zealand Dollar Lags the Aussie Rally Despite Bollard's Hawkish View
* Gold Finally Sees a Breakout but Quickly Retraces the Losses
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Written by: John Kicklighter, Senior Currency Strategist
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| Dollar Exceptionally Volatile but Fails to Jump Start Rally |
| Like the rest of the risk-sensitive assets in the market, the US dollar was exposed to tremendous volatility through Tuesday's session; but the high-level safe haven wouldn't translate activity into clear direction. Once again, to understand this price action (to establish what is important and where we will head going forward); we trace impact back to the quality of the catalyst. In a trading day that was heavily influenced by headlines and unexpected fundamental drivers; we note that there was ultimately no progress offered on underlying investor sentiment as the there was no material change to the balance of risk and reward through the immediate future. The dramatic rebound in equities as well as high-yield currencies and subsequent drop in sanctuaries like the greenback has come through relief. The threat of a building financial crisis has eased without tangible evidence of its spread (beyond what is already priced in). Yet, if we are to extend the climb in capital markets; we need more than breathing room. We need a fundamental reason to believe growth, revenue and yields will expand going forward... |
Best regards,
DailyFX Research Team
research@dailyfx.com |
20:51
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