Optimism in the European debt crises sent the Euro stronger against thirteen other currencies. The Euro is rallying for the past few days and will most likely continue to do so with German chancellor's acceptance to the urgency of a bail out fund.
In the mean time, not much improvement on the US unemployment data with a fall of 0.40%, not much from the previous six months at 8.5%. US Dollar Index
is not showing some very promising figures at the moment.
As for the five, ten, and thirty year treasuries
, there has been a significant yield drop in all three figures. Treasures are reporting yields 0.68%, 1.68%, and 2.8% respectively.
Could this be just a temporary or would it result into some serious depreciation of the US Dollar? Historically speaking, several bail out attempts of the debt crises has drawn optimism and also skepticism. This isn't the first time a bail out attempt has been proposed and probably will not be the last.
Let's hope the US Dollar is only temporarily in the dumps, but the Euro is definitely recovering from a bad shock. Weekly technicals show US Dollar heavily in the oversold region and there is simply no telling when it will rebound.
As for the moment, with an 80% correlation to gold, the Australian Dollar is also doing exceptionally well in the recent months putting even more pressure on the US Dollar. The US Dollar currently has to fight back on five other major currencies at the moment.