Forex Report
The USD is fostering strength for a third consecutive day; and is currently trading higher vs. all major currencies expecting JPY. The USD Index is up .66% and has rebounded nicely after falling to a record low on Monday. The Libor rate for one-month Euro lending climbed from 4.1% overnight to 4.8%, thanks to a surge in European bonds. This surge in rates seems to be dragging down the EUR today, as it is down .6% vs. the Greenback. Cable is lower by 1%, as Nov. house prices fell more than expected at 0.8%. Also, the BOE pumped $20.6bln into the banking system today to forestall any liquidity issues. This seems to have caused a resurgence of credit fears abroad. If this fearful sentiment continues in Europe, the USD could potentially enjoy a more sustainable rally—especially if short-term borrowing rates in Europe continue to climb.