After the dozy holiday fortnight, the dollar re-established itself as the currency least likely to collapse.
Forex spread trading investors unwilling to put their faith in the euro sought the safety of the dollar or the Japanese yen. There was little to choose between the two.
There also seemed to be a change of heart about the implications of stronger US economic data.
In recent months there has been a tendency to treat positive figures as dollar-negative. Simply put, if the American economy is doing well, there is no need to worry about the global economy and therefore no need to seek the shelter of the safe-haven currencies.
When Friday’s employment report showed a 200k increase in non-farm payrolls, together with a fall in the unemployment rate from 8.7% to 8.5%, investors’ reaction was to buy the dollar, just as they would have done in the olden days.
By MoneyCorp.
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