Dollar Mostly Firmer

The US dollar is mostly higher as a result of disappointing German, UK and New Zealand economic data. However, Prime Minister Kan succeeded in holding off the challenge at the DPJ leadership contest, easing the threat on the margins of intervention, which helped lift the yen to new 15-year highs against the dollar. Like the yen, the Swiss franc also drew succor from the reduced appetite for risk and the dollar briefly traded through CHF1.00 for the first time since late last year.

Euro support is seen near $1.2800 and sterling already successfully tested support near $1.5340. Risk-off sentiment may in some ways be seen as a correction to yesterday’s near-euphoria. Currencies perceived as leveraged for growth, the dollar-bloc, the Scandis, and most emerging market currencies are on the defensive.