- Dollar Index rises 1% despite falling US yields.
- Risk aversion sentiment dominates Wall Street open, Dow Jones falls more than 500 points.
- EUR/USD suffers its worst day in months and tests a crucial support zone.
He EUR/USD suffers a sharp drop this Wednesday and has just set a new two-month low at 1.0521. He is hovering around 1.0550, after testing a critical level. The dollar shot up, while the markets fell due to the concern of the banks.
The dollar rises on risk aversion, despite the returns and data
US economic data came in lower than expected, adding to expectations of a dovish Federal Reserve. The economic figures are offset by developments in the banking crisis that crossed the Atlantic on Wednesday.
Fears about the health of Credit Suisse (CS) sparked a massive sale of the bank’s holdings around the world. CS Holdings Fall 13% on Wall Street; after being down almost 30%. Its main shareholder, the Saudi National Bank, ruled out contributing more money.
US Treasury yields rise sharply and their yield hits new lows. On Wall Street, the Dow Jones falls 1.85% and the Nasdaq 1.45%.
In the forex market, the Japanese yen is the best performer, followed by the US dollar. The euro falls against its main European competitors. EUR/GBP fell to its lowest level in two months below 0.8730, while EUR/CHF fell towards 0.8700.
EUR/USD is losing more than 200 points, on the worst day in months.
For now, the EUR/USD slide has found support at the critical zone between 1.0500 and 1.0525, the confluence of the previous lows and the 100-day SMA. A consolidation below would open the doors to further euro weakness.
technical levels
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
