The Euro rallied near all-time highs in response to the dollar tumble, hitting intraday peaks of $1.3825 before settling to trade at $1.3800 through time of writing. The British Pound likewise saw pronounced rallies, challenging the psychologically significant $2.0400 mark and changing hands at $2.0371. The carry trade-favorite Japanese Yen was the only major currency to fall against the greenback, with the dollar adding ¥1.00 to ¥119.72.
A portfolio that held the three highest-yielding major currencies and
remained short the three lowest produced its strongest gain since mid-June.
Though the simple buy-and-hold strategy remains over 3 percent below its
all-time high, today’s price action certainly bodes well for the future of
carry trade strength. Helping to boost high-yielders was an overnight interest
rate increase from the Reserve Bank of
US stock markets continued their recently volatile price action, with the
Dow Jones Industrial average nearly 200 points higher before coming to +123 an
hour ahead of the close. The NASDAQ Composite was the largest percentage gainer
of the three major indices, adding 2.2 percent to 2,618.83, while the S&P
500 was similarly bid at 1.33 percent improved to 1,496.36. Stock markets
showed clear hesitation before continuing strong gains, but the late
retracements had little effect on the fast-dropping Japanese Yen.
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.
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