Is there Breakout Potential for Loonie Crosses on Jobs Data?
Dollar and Yen Surge as Dow and Risk Appetite Collapse but what is Left for Friday’s NFPs? Both the US dollar and Japanese yen responded to the dramatic plunge in market-wide risk appetite today by falling back on their role as safe havens currencies. While the yen crosses were perhaps more volatility in their declines, the greenback was the more influential currency owing to its prevalence as the world’s primary reserve asset. The dollar index rallied to highs not seen since July and EURUSD tumbled nearly 180 points to close well below 1.3750. Looking at a higher frequency chart of most of the major pairs, it was clear that the dollar’s strength was surprisingly consistent (versus short bursts of rapid moves). This is a good indication of trend; but fundamentally it suggests the move was orderly rather than set off by a specific event. Therefore, concerns over the credit health of certain European Union members or a sudden panic before Friday’s non-farm payrolls (NFPs) are not the cul
