The dollar rose against a basket of currencies following a resurgence of risk aversion in the market. The EurUsd fell 185pips while UsdJpy gained. The GbpUsd fell 113 pips.; Equity markets fell 2.06% or 181.16pts and the FTSE was down 2.61% or 115.94pts. The yield curve on 10 year US treasury notes fell .07% to 3.74%. Commodities were weaker today with oil finding support at $70bbl and gold hovering above $928oz.

The dollar extended gains versus the euro as Russian finance minister Alexei Kudrin said his country has full confidence in the U.S. dollar at the G8 meeting over the weekend. Russian confidence and U.S. data reporting that the factory sector contracted at a deeper rate this month helped send the dollar to a high of $1.4337. In Europe, the euro fell against most majors in response to comments by the president of the German chamber of commerce and industry, who said the nation’s credit and funding conditions are worsening. The euro was also hurt by weaker than expected industrial production data from last week. The Bank of England seeks to increase its 150 billion pound asset buying program to fight inflation; 5bln pounds worth of bonds are being put up for auction tomorrow. Sterling is expected to weaken against the dollar in the short term as risk averse behavior becomes more prominent. In the UK, 10 year gilts also dropped, but by 4bp.Falling commodity prices put downward pressure on the Aussie and kiwi for first time in three days and loonie fell to a three week low despite a positive G8 meeting.

G10 Advancers and Decliners vs USD

Global Indexes Current Level % Change
DJIA Index8,612.13- 2.13
S&P 500 Index923.72- 2.38
NASDAQ 100 Index1,816.38- 2.28
Nikkei 225 Futures9,960.00- 0.80
Hang Seng Futures18,240.00- 0.01
FTSE futures4,329.00- 2.38
SMI Futures5,394.00- 2.25

World Markets Current Level % Change
Crude wti70.62- 1.97
Gold928.50+ 0.02
Silver14.10+ 0.18
USD Index81.12+ 1.22
VIX30.81+ 9.45