Sign inJAHResearch's Commentaries
Russian Treasury Market Threat Sends Investors to the U.S. Dollar
Following a two-day setback, the U.S. Dollar regained strength as an announcement by Russia to cut its holdings of U.S. Treasuries spooked investors into the safe-haven Dollar.
The same announcement helped put in an early top in the equity markets and chased traders into lower risk assets.
The Treasury Bond market also fell hard as yields shot up as traders braced themselves for more supply and less demand for Treasuries in the future.
It may take a few days for the Forex markets to adjust to the Russian threat. In the meantime, volatility could pick up as a rally in the Dollar may catch many traders by surprise. After the huge drop in the Dollar, short positions have to be large. Today's trading action in the major currencies indicates that Dollar buyers may have already stepped in. A rally by the Dollar through Monday"s high may ignite the start of a massive short-covering rally.
Tags:forex
Share
