The dollar traded in risk- aversion mode (stronger against the higher-yielders and up vs. the yen) in N.Y. as stocks declined, bucking the trend seen overnight. On the day, the greenback ended with a gain of 0.56% to the euro, 0.65% against the pound and 0.24% against Australia's currency as it gained 0.72% on the yen.
The cash markets reversed the overnight gains in S&P futures, and sent the index lower. The Treasury markets are now looking to put pressure on the dollar to hold current values as the Fed starts this week’s auction of massive amounts of new notes. The oil and equity markets have lost the battle on Monday to hold recent gains, but if Asian and European markets push stocks higher it seems to be only a matter of time before Usd short sellers are forced into the game. This is a light week of U.S. based economics, but there is enough global news to more than make up the momentum that will be needed to push the index down through support at 84.00.
The $ Index technical chart wave structure is looking very bearish in the long term, as the market broke through major support lines at the end of last week around the 85.00 area. All that seems to be needed is another period of stocks holding current levels to get things moving lower.