Forex carry trades pulled back on Tuesday, as the low-yielding Japanese yen gained across the majors, while high-yielding currencies like the Australian and New Zealand dollars fell. Indeed, while the news of the US government's seizure of Fannie Mae and Freddie Mac led risky assets to gain throughout the financial markets, we've seen investor confidence dwindle as traders become skeptical of the long-term benefits of the intervention.
Source: Bloomberg Dow Jones Industrial Average (Daily Chart) Source: Bloomberg