Wednesday, 30 September 2009

Dollar: no more status as safe heaven currency

Dollar: no more status as safe heaven currency

The basic question which the dollar traders have been asking for is obviously about whether the risk sentiment has taken a major turn for the improvement or if the dollar is dropping its position as a safe haven currency. This past week, month-long congestion patterns behind the major pairs went down in conclusion. Breakouts were predictable, but taking into consideration that the low levels of sentiment and the severe position for the worldwide financial system, the primary bend was towards a recovery of the bearish trend that has found deleveraging favoring the world’s most liquid currency. The Japanese yen in fact rallied in opposition to its liquid counterparts following the US Congress struck down greatly debated rescue for the ailing auto industry.

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