The US dollar index neared its post-credit bubble high of 89.25 earlier in the day, reaching 89.09 before backing off. With Citi and AIG receiving fresh government “care” in subsequent trading sessions, confidence in large financial institutions is at a low ebb. The dollar and gold have been the two most consistent risk barometers in recent months; gold made its big move last week and the dollar may have already made its catch-up move first thing Monday morning.
Keep this index in mind if EUR/USD catches a bigger bid as the session wears on. It could be a pawn in a larger macro game than anything Euro specific that sparks a rebound in the single currency today.
