Stable U.S. Equity Markets Help Limit Dollar Gains
Overnight the Dollar climbed sharply higher as global investors dumped stocks and commodities on concerns that Dubai World’s debt problems would escalate into a worldwide credit crisis similar to the one the U.S. faced when Lehman Brothers collapsed in 2008. Fear raced through the global investment community, making lower-yielding assets such as the Dollar and the Yen more attractive. The situation in Dubai began to break late Wednesday night and spilled over into Thursday while U.S. markets were closed for the Thanksgiving holiday.
The U.S. Dollar gave back over 50% of its early morning gains as investors took profits after a strong two-day rise. The inability to break equity markets lower after the opening helped drive up demand for higher risk assets. Investors began selling the Dollar after it became clear that there would be no panic selling of higher risk assets.
Investors began to liquidate higher risk assets when the largest corporate entity in Dubai asked creditors for a six-month postponement of $60 billion in debt payments. This action by the Dubai entity raised concerns that other emerging market entities may be overextended in debt which could lead to even more liquidation.
- FINZ Futures EP.6: What are Tick Charts and Why Use Them?
- Traders Unscripted: Market Timer Fari Hamzei PT.3 - Quant Trading
- Traders Unscripted: Market Timer Fari Hamzei PT.2 - Failure & Success
- Traders Unscripted: Market Timer Fari Hamzei in "Meet the Masters" Series PT.1
- Traders Unscripted: Options Legend Larry McMillan Interview PT.2
