The dollar surge was caused by optimism that a deal will eventually be made to help the global financial market. Due to the last day of the quarter, investors were reversing their overseas stocks into dollars, which helped the US dollar gain further ground. The Case-Schiller Home Price Index came in lower than expected but was overlooked due to the Chicago PMI coming in at 56.7 from its expected 54.6.
However the dollar has further gone into uncertainty as analysts have said that if US doesn’t find a resolution to the financial turmoil, central banks from around the world could look to diversify away from the US currency.
The Euro took a dive yesterday due to rumours of sudden rate cuts. German unemployment fell to -29k from -15k expected. Due out today for the Euro is PMI for Germany and Europe, Unemployment for Euro Zone, and ECB president speaking at 10am.
The Sterling followed on the back of Euro by weakening against US dollar. Due out today for the UK is PMI Manufacturing.