The U. S Dollar surged today, hitting a 2-year high versus the Euro and a group of currencies, while the Japanese Yen continues to gain as investors moved out of riskier assets.
Although there were signs that liquidity in the money markets was easing, it did nothing to improve investors’ confidence about the looming and protracted worldwide recession and as a result, investors were paying particular attention to their leverage position, with European share prices falling by more than 4%.
Because investors are becoming concerned about their leverage in the foreign exchange markets, low-yielding Japanese Yen jumped because carry trades were unwound, and as a result, the Japanese Yen hit a 4-year high versus the Euro.
On October 22 at 12:18 GMT, the Euro fell by 1.6% against the U. S. Dollar to $1.2842. The U. S Dollar rose against a group of six major currencies by 1.37% to 85.577 .DXY. However, the U.S Dollar fell by 1.4% against the Japanese Yen to 98.88 Yen. Pound Sterling dropped against the U.S Dollar, its lowest in 5 years, at $1.6203