The US dollar and Japanese yen both took a hit against the commodity dollars on Monday, as risk appetite improved after the Group of 20 (G20) concluded their summit with a pledge to keep “continue to implement decisively our necessary financial support measures and expansionary monetary and fiscal policies…until recovery is secured.”
As DailyFX Analyst Ilya noted this morning, building consensus on such issues as bank regulation and executive compensation is already proving difficult in the absence of imminent economic meltdown, and agreeing on a coordinated plan to withdrawing stimulus seems like it will be more daunting still, threatening sharp swings in government bond yields and the corresponding currencies.
As we enter the start of the European trading session on Tuesday, volumes should start to pickup, which creates potential for breakouts from the summer trading ranges will rise substantially. Overall, the status of the DXY index will be important as it has managed to hold above a rising trendline drawn from the July 2008 low at 77.90 and below a falling trendline drawn from the 2009 highs at 78.50/60.
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[B]View the [/B][B]Daily Fundamentals[/B][B] in its entirety for a look at what happened across the majors.[/B]