USD INDEX GRAPHIC REWIND
The dollar index
(DXY) was dominated by all things euro
related, with the single-currency experiencing some whipsaw price action which translated into some sharp moves in the index. The dollar started the day well bid on the back of the German naked short-selling ban and related official comments, however, this bid tone was quickly reversed as the euro soared. The key drivers in this move were the SNB intervention in the Eur/Chf
cross and heavy talk of flows favouring the euro. As a result the index spent a large portion of the North American session under intense pressure as the euro reversed its recent losses and decimated the commodity currencies, despite equity and commodity weakness. The dollar did finally catch a bid going into Asian trade, when the euro settled, a GDP miss out of Japan and weak equities weighed on sentiment bolstering the Usd once again.
Looking ahead, we have already seen some sharp moves in the dollar index early in Europe on the back of some strong rhetoric from European officials defending the euro-region and single currency. In North American trade weekly jobless claims are due, however, these may be overlooked as investors continue to focus solely on Europe and the euro.
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