USD – Markets In A Whirlwind

The USD lost plenty of ground to the EUR, GBP, and JPY on day in which the broad markets exhibited steep declines on international bourses. Wall Street and all the major American equity indexes plunged along with their global counterparts. The USD fell to the EUR and GBP and its move can be interpreted in a couple of ways. One, it could be claimed that some stability has come back into the EUR based on regulations that Germany has invoked and possible Central Bank intervention. Two, it could be said that what was witnessed on Thursday may have been short covering taking into account that short positions on the EUR versus the USD have been predominant and that some investors may have simply been cashing in on their positions. No matter the reason for the volatility in the currency markets, equities proved that a palpable unease looms and the major bourses find themselves under a vast array of pressure going into Friday’s trading.

The weekly Unemployment Claims were released along with the Philly Fed Manufacturing Index yesterday. Both reports turned in lackluster outcomes, particularly from the Unemployment Claims which turned in a number of 471K compared to the estimate of 439K. To make matters worse investors had been expecting an improvement in jobless claims, not the slide that actually took place. Throwing oil onto an already large fire, the U.S. Senate passed a regulatory bill yesterday that seeks to throw new rules on Wall Street and financial institutions making investors an increasingly nervous bunch. Commodity prices are struggling, corporate earnings have been rather unimpressive from many sectors, and certainly the European Sovereign Debt problems have not suddenly gone away. There will be little in the way of economic data from the States today, but traders will have enough on their plates when it comes to judging risk appetite while making their decisions in what is likely to be a loud market.

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