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Dollar “Nationalized” For The Weekend

The US dollar fell off a cliff against all the currencies. The fall began at 16:50 GMT, during the time that financial stocks plunged at Wall Street. The nice gains that the dollar made during the week were erased in 15 minutes, and the fall continues.  

EUR/USD leaped 200 pips, from around 1.2650 to 1.2865 at the time of writing. GBP/USD jumped about 120 pips: from 1.4320 to 1.4440. USD/JPY fell by around 130 pips, from 94 to 92.70.  

And the greatest move of the day was at the might Alps: USD/CHF made a stunning 300 pips (!) plunge from about 1.18 to under 1.15. Amazing.

The US dollar fell also against the minors: Canadian, Australian and Kiwi dollars all beat the US dollar.

And why did this happen: The only thing I can relate to is the fall of the financial stocks in Wall Street. CitiGroup and Bank of America are on the verge of being nationalized. It looks imminent. Now, maybe traders fear of a deeper collapse in the American financial system.

Note that it came near the twilight zone, when Asia is already enjoying the weekend, European markets are closing and the New York session is far from the beginning.

Earlier, the dollar extended its gains on strong CPI. That belongs to the past…

Any good explanations to this dramatic fall are most welcome.

Yohay Elam

Yohay Elam

Yohay Elam: Founder, Writer and Editor I have been into forex trading for over 5 years, and I share the experience that I have and the knowledge that I've accumulated. After taking a short course about forex. Like many forex traders, I've earned a significant share of my knowledge the hard way. Macroeconomics, the impact of news on the ever-moving currency markets and trading psychology have always fascinated me. Before founding Forex Crunch, I've worked as a programmer in various hi-tech companies. I have a B. Sc. in Computer Science from Ben Gurion University. Given this background, forex software has a relatively bigger share in the posts.