US Dollar Appreciates Against Euro on Dow Jones Tumbles

A virtually empty US economic calendar left the dollar to the whim of broader financial market forces, and little stood in the way of a Dow-led greenback rally. Such risk aversion likewise led to substantial drops in domestic Treasury yields and similar moves in short-term interest rate expectations. Yet markets seem impervious to developments in domestic bond yields. The dollar’s resilience in the face of sharp Treasury yield drops represents a clear break from more normal market conditions. That said, it remains relatively clear that risk sentiment will be the main driver of dollar price action through the coming months of forex trade.   

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Written by David Rodríguez, Currency Analyst for DailyFX.com,

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