Forex carry trades and equities slumped throughout the day, only to rally toward the end of the US trading session as news that Lehman Brothers had entered sales talks helped quell risk aversion. In fact, the CBOE's VIX Volatility Index ended the day little changed from yesterday despite a surge when the market's opened this morning. The shift in sentiment has helped lift forex carry trades, as GBP/JPY currently trades up 200 points from the intraday low of 185.91 while the US dollar has pulled back across the majors.
Dow Jones Industrial Average (Intraday Chart)
Source: Bloomberg
VIX Index (Intraday Chart)
Source: Bloomberg
Written by Terri Belkas, Currency Strategist of DailyFX.com
E-mail: [email protected]
