Having Fear for Thanksgiving – Yen Crosses Plunge

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Dubai World gave the US dollar a present for Thanksgiving – World fear. Fear of ongoing credit problems is sending the dollar up, and the Yen higher, just as it seemed the US dollar is falling off a cliff. Who said holidays bring boring trading?

Dubai World, famous for the artificial date shaped islands it built, is defaulting on a huge debt. This default causes lots of trouble for British and German banks and reminds us that the credit crunch is far from over.

The result in forex markets is fear – this fear sends traders to the safe haven currencies – the US dollar and the Japanese. USD/CHF, which fell below 1 yesterday, is on the other side of parity today. EUR/USD, which finally made a break out yesterday, is back to its range. The British Pound is seriously beaten – GBP/USD is under 1.65.

One currency survived the dollar rush – the Japanese Yen. USD/JPY is clinging to the 14 year low, remaining under 0.87 and not getting an intervention by the Bank of Japan. The famous dollar yen correlation is at its best.

This makes the Yen crosses the strongest movers on the board – AUD/JPY falls by 2.70% to 79.01, GBP/JPY by 2.27% to 142.60, EUR/JPY by 1.75% to 129.81, and the list goes on.

Currently, the downfall has stabilized, but when US stock markets re-open tomorrow after the holiday, the action will surely continue…

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About Author

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 the 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.