Euro Jumps as ECB’s Nowotny Says Zero Rates ‘Neither Desirable Nor Needed’
• British Pound Gains as UK Retail Sales Rise, UK GDP Revision Could Weigh Next Week
• Canadian Dollar Shows Little Reaction to Bigger Than Expected Drop in Canadian CPI
US Dollar, Japanese Yen Down as CPI Shows the US is Teetering on Brink of Deflation
The US dollar and Japanese yen ended Friday mostly lower despite clear signs of risk aversion as evidenced by gold's test of $1000/oz, sharp drops in global stock markets, and a rally in government bonds, including US Treasuries. However, with the majors generally still contained to ranges and near their spike highs/lows, it may be a bit early to say that the US dollar and Japanese yen have lost their status as “safe havens,” as correlations have a tendency to fade in and out over time. Looking at charts of the DXY Index, price pulled back from resistance at the 2008 highs and the outlook for the greenback for the next few weeks may hinge upon whether or not the drop signal a reversal or ultimately yields a break higher. Link...........
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