Now the dollar is in the crosshairs
With Moody's making good on its promise to put the USD on review for possible downgrade if the debt limit is not raised by mid-month, the latest talks in Washington appearing to end in further acrimony, and the Fed Chairman leaving the door ajar regarding QE3, the fx market has (for a change) been directing its ire at the dollar over recent days. For the euro, this is providing some much-needed respite at a time of considerable vulnerability. Indeed, the EUR almost reached 1.43 overnight (now 1.42) just two days ago; it was looking dreadful down near 1.38. Although the single currency has enjoyed a bounce, it is both the Japanese yen and the Swiss franc that have the trust of both traders and investors these days. USD/JPY again touched 78.50 overnight, before spiking higher to 79.50 amidst rumours that the BOJ had intervened. The rhetoric out of Tokyo is intensifying, with Finance Minister Noda describing the recent gains in the yen as "problematic". The other currency of choice remains the Swiss franc, which has continued to advance overnight - the Swissie printed a new record high of 0.8083, while EUR/CHF also achieved a fresh record low at just under 1.15. With major currencies such as the dollar, the euro and the pound being continually debased, it is little wonder that investors are seeking refuge in currencies such as the yen and the Swiss franc, as well as gold. The latter is now up to $1,585 an ounce, an increase of $100 in less than two weeks. |
