MORNING BRIEFING: Risk aversion up, but US Dollar down

[RTFX-Trading]

MORNING BRIEFING:  Risk aversion up,  but US Dollar down

What’s new:
Euro: Finding support on short covering
US Dollar: Unusually down despite higher risk aversion
Japan: Bank Of Japan keeps key overnight loan rate at 0.10%
United States: Senate approves the most significant increase in regulation of US banks

Today:



Rates in Asia and Indices:
EURUSD: 1.2672 - 1.2455.
USDCHF: 1.1581 - 1.1449.
GBPUSD: 1.4457 - 1.4328.
EURJPY: 114.40 – 111.02.
USDJPY: 90.48 – 89.04.
DowJones: 10’068.01  -3.6%
NASDAQ: 2'204.01 -4.11%
S & P 500: 1'071.59 -3.9%
Nikkei: 9’784.54 -2.45%
Shanghai 2’583.52 +1.08%  
Gold: $ 1'178.00
Crude Oil: $ 70.40
 
Comments:

EURUSD traded higher as stop losses became effective, and short positions were closed. This wave of short covering pushed the euro up to highs of 1.2672 this morning.  On the low side the EURUSD reached lows of 1.2455. According to RTFXTradertip today’s next Resistance level lies at 1.2762 and first support is at 1.2324.

It is interesting to note that while risk aversion was up, US equity indices down and VIX index (an index for implied volatility) up – one would have expected the US dollar to go up too, but instead the US dollar lost ground, has the greenback lost its safe haven status? Possibly this can be explained by what seems to be a pull back on European Funding concerns paired to a growing concern about the broader global recovery backdrop.


Good day,


Rudolf Muscat

Trading desk

RTFX Ltd
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