While focus may have been (and still is) on the yen and the Swiss franc and their respective fresh lows the dollar did notch up some decent gains yesterday too. Flight to safety was the name of the game yesterday as fears surrounding the European banking system were resurgent weighing heavily on sentiment and ending the bright start to September. Gold also was on the move yesterday, reaffirming our belief that a broad flight to safety is underway since players get spooked as soon as any mention of concerns regarding European banks is mentioned. The dollar has lost a little ground in Asia as players have continued to press the yen and franc to these aforementioned lows but we maintain that as long as investors are seeking safety the dollar will keep an underlying bid tone.
Looking ahead, we have a busy calendar in Europe today but little that will be able to distract investors from larger concerns and fears of a slowdown in growth during Q3. The North American docket is relatively quiet except for the Bank of Canada’s interest rate decision until late in the day when the Fed releases its Beige Book Economic Report which could lead to some volatility.
Written by Jonathan Granby, DailyFX Research Team
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