US Dollar rallies, keeps fighting

The US Dollar firmed up a bit as traders cover short positions, and higher yielding instruments fell on profit taking. The US$ was a bit firmer Tuesday, pulling up from its recent 14 month lows, as investors unwound short positions and took profits in high-yielding currencies after a sharp drop in stocks and commodities. The VIX indicator .VIX, Wall Street’s favourite barometer of market volatility, jumped 9.16% Monday, highlighting the skittish sentiment on stocks, and other riskier assets like growth linked currencies. The US$, a safe-haven when doubts about a global recovery emerge, traded firm around the 76 mark against a basket of currencies, posting its best daily gain since September Monday, pulling further away from a 14 month low of 74.94 on Oct. 21. Savvy market observers said the heavy short positioning on the US$ had made many investors hesitant to sell the “greenback” despite the economy’s weak fundamentals. Data late last week showed currency speculators increased their bets against the US$ in the week to Oct. 20 with the value of net short positions rising to US$18.65B from US$17.99B the week prior. Read more
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Paul A. Ebeling, Jr. writes and publishes The Red Roadmaster's Technical Report on the US Major Market Indices for the Stock Preacher. His report is a weekly, highly-regarded financial market letter, read by opinion makers, business leaders and organizations around the world. Ebeling has studied the global financial and stock markets since 1984, following a successful business career that included investment banking, and market and business analysis. He is a specialist in equities/commodities, and an accomplished chart reader who advises technicians with regard to Major Indices Resistance/Support Levels.
