US Dollar Shaking Off Risk Aversion

Even though the stock market dropped by the largest amount since 2000, the US dollar is shaking off risk aversion to rebound back towards its monthly highs against the Japanese Yen. I’ve been keeping a close eye on gold prices and the fall in gold this morning confirms that the markets have not been spooked by the drop in the Dow. The strong durable goods numbers dollar bulls hope. The stock market could actually recover today since the durables number indicates that not all businesses have cut back their spending. The divergence between the price action of the dollar, the stock market, gold and oil prices indicate that risk aversion yesterday was limited. Even though the dollar dropped against the Japanese Yen, it rallied against all of the other G10 currencies. Within all of the volatility yesterday, the dollar index... [read full story]