This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

USD, Safe Havens Gain on Goldman Suit

By Omer Esiner of Travelex

The U.S. dollar rallied across the board as a sharp decline in investors' appetite for riskier assets saw capital flow back into traditional safe-haven assets like the greenback, U.S. government bonds and the Japanese yen. Friday's announcement from the Securities and Exchange Commission that it had filed fraud charges against banking giant Goldman Sachs sent shockwaves throughout financial markets and prompted a wave of profit-taking in riskier assets that had performed so well over recent months.

The pullback in equities and risk appetite was furthered by renewed concerns about sovereign credit risk in the euro zone. A meeting between the IMF, the European Central Bank and leaders of the EU, which was requested last week by Athens, was postponed due to a cloud of volcanic ash that has grinded air travel in Europe to a halt. Uncertainty over how any aid package will be applied and whether Germany will veto assistance for Greece prompted a widening of credit spreads between Greek and German bonds, a clear indication of investors' nervousness.

Other risk assets like commodities and currencies, like the AUD, NZD and CAD, who depend on global demand for resources, came under sharp selling pressure as well. Crude oil slipped by nearly $2.50/barrel to a three-week low, which sapped much of the Canadian dollar's recent strength. A quiet data calendar will keep moves in equities and risk assets in the spotlight today. USD: The U.S. dollar rose to a one-week trade-weighted high overnight, broadly supported by a flood of safe-haven flows out of risk assets. The broad flight to safety was triggered by Friday's bombshell that was dropped by the SEC in its case against banking giant Goldman Sachs.

Goldman was charged with fraud by the SEC in connection with a debt deal involving subprime mortgages. While the story may have only limited implication to the longer-term outlook for currency markets, it did trigger profit-taking in equities, which had risen so sharply over recent months.

Global stock indices were trading at their highest levels since late 2008 and were largely seen as due for a correction anyway. The Goldman story may prove to be a catalyst for a longer-term pullback in stocks, which would keep risk appetite under pressure and continue to support the greenback.
1 of 3

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
AAPL $95.18 1.64%
FB $117.43 -0.96%
GOOG $692.36 -0.84%
TSLA $232.32 -3.92%
YHOO $36.01 -1.42%


Chart of I:DJI
DOW 17,750.91 -140.25 -0.78%
S&P 500 2,063.37 -18.06 -0.87%
NASDAQ 4,763.2240 -54.37 -1.13%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs