I’m sorta getting the feeling that the dollar has taken the financial markets by the scruff of the neck and is leading them rather than the other way around today. News of Citic’s big FX exposure helped upset the uneasy equilibrium we found our selves in for much of the last two weeks and sent the dollar on a fresh tear. Commodities are showing no ability to rally despite tension in the money markets easing. Deleveraging continues as well as hedge funds lose their sponsorship and the industry undergoes its own bursting bubble. That should keep equity markets from rebounding too substantially for the balance of 2008.
EUR/USD is eying barrier options at 1.3100 while USD/JPY is losing ground as well, down to 100.35. Aud is closing in on 0.6800 as commodity curriences suffer broadly and AUD in particular.
