Dollar Rise - Too Fast, Too Furious?

Source: Daily FX

The month of August is typically characterised by thin markets, rising volatility and quite sharp FX movements. Commercial clients are traditionally conspicuous by their absence at the beginning of the month and speculative clients have free hands.

This August has been no exception and has in fact been packed with rather large moves in major currencies: the USD has gained 5.4% against the EUR, JPY has advanced 4.6%, GBP has lost 2.2% and the AUD has dropped 2.8%. The appreciation of the USD against the EUR has - with good reason - received most attention over the month. In the first half of the month, EUR/USD ended the uptrend that started some six years ago. And it was indeed a sharp reversal.

Some forecasters warned investors "not to stand in the greenback's" way, but the dollar rush abated in the second half of the month with EUR/USD trading around 1.47, albeit surrounded by noticeable fluctuations.