Posted by: Commentary from Boris Schlossberg and Kathy Lien, Directors of Research, GFT
Volatility has ripped through the foreign exchange market as the U.S. dollar gave back its earlier gains. Safe haven flows drove the dollar higher at the beginning of the U.S. trading session, but the currency lost value when equities took off. The big story in the foreign exchange today was the Swiss National Bank’s controversial and nuclear decision to intervene in the currency market, raising fears of a global FX war. By coming into the foreign exchange market to sell Swiss Francs, the central bank has driven the Euro and U.S. dollar sharply higher. The gains in these currencies were exacerbated by the rally in U.S. equities and a stronger retail sales report. The rally in the foreign exchange market today indicates that risk appetite has improved.
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