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The US dollar finished the period of grace and returned to falling. The Aussie is at new highs, and the Pound is continuing its comeback. Who stays behind this time? The Yen –  Dollar Yen correlation is back in town.

After quite a volatile day, the Asian session sees renewed dollar weakness. The strongest currency of these times, the Australian dollar, makes the most of it. AUD/USD reaches new highs, trading at 0.9250. The 0.93 resistance line is getting close, and this happens very fast. The Aussie Forecast outlines the road ahead.

The British Pound, the sick currency which was used to be beaten, is continuing its very nice comeback. 550 pips isn’t enough after months of depression. GBP/USD continues the upward trend and is now trading higher than earlier peaks, at 1.6335.

Strong and weak currencies gain

The Canadian dollar and the Swiss Franc, which are both racing to parity, have been set back by some dollar strength earlier on Thursday but are now retracing back to previous levels, getting ready for parity. USD/CHF, at 1.0140, is much closer to parity, and has a better chance to win the race. USD/CAD, hit by a bad Manufacturing Sales number is trailing behind at 1.0302.

Looking at the most popular pair, EUR/USD, we can see that it’s also close to the yearly peaks achieved on Thursday morning – 1.4867. It now trades at 1.4950. The round number of one and a half euros for one dollar is very close. I’m now convinced that EUR/USD made a true breakout.

Dollar Yen Correlation

The Asian session between Thursday and Friday is quite volatile this week. And there’s an Asian currency not enjoying the dollar’s weakness: the Japanese Yen. USD/JPY is trading higher, at 90.70. The strong dollar yen correlation is back. Long positions on Japanese crosses enjoy this. EUR/JPY and GBP/JPY are on the rise.

This volatile week isn’t over yet. I’ll update in the morning (GMT) with Friday’s events.