No dog days of summer for the currency markets as the dollar continued to decline in July. Plagued by persistent problems in the housing market, fear of a credit crunch and the first signs of US economic slowdown as job gain failed to clear the 100K level, the greenback slumped against all of it major counterparts. Even the yen gained strength against the buck as risk aversion hit the equity markets. August may well bring some reprieve from volatility with most of the FX world on vacation, However the same set of problems will be there when traders return to their desks and turbulence could hit the markets once again as fall approaches.
Boris Schlossberg
Senior Strategist
