The US dollar continued its upward movement today as yesterday’s statement of the Federal Reserve continues to force Forex traders to shun risk and to seek safety. The yen outperformed the dollar as a safe currency.
The yesterday’s announcement of the Fed put the Forex market in the risk aversion mode and it’s still in place, bolstered by the signs of a slower economic growth in China. The greenback benefits from this situation as a refuge currency. The Dollar Index, tracking the US currency versus the currencies of six nation’s major trading partners, rose 1.4 percent to 78.447 after it touched 78.798, the highest level since February 14. According to the JPMorgan Chase & Co. index, the implied volatility for currencies of the Group of Seven nations climbed to 15.64, the highest level since May 2010.
Commodities, stocks and growth-related currencies, on the other hand, declined as traders ran away from risk. The Standard & Poor’s 500 Index dropped 3.2 percent, declining for the fourth session. The Standard & Poor’s GSCI Index erased gains of this year, tumbling 4.9 percent.
EUR/USD slumped from 1.3571 to 1.3471 today as of 22:22 GMT after touching 1.3382, the lowest level since January. GBP/USD dropped from 1.5498 to 1.5359 and reached earlier 1.5326, the lowest level in a year. USD/JPY fell from 76.44 to 76.26, while it jumped as high as 76.97 intraday.