Just Thursday, the US dollar was the weaker opponent, but things changed swiftly on Friday for the currency. The US dollar rose more than 200 pips against the Japanese yen, hitting an intraday high of 104.70, following the strong rally in US stocks which reacted positively to earnings results by Google. EUR/USD, which hit an all-time high of 1.5985 just yesterday, bounced more than 270 pips down from that level and is now trading in the 1.5700s. Traders closing out their Euro long positions have also pulled down EUR/GBP, and the British pound has been a strong performer on Friday.
Former Fed Chairman Greenspan told a conference in Italy that he doesn’t know how long the US recession will last as that will depend on the financial crisis.While he would like to say that the worst of the credit crisis is over, he said the credit market situation is still critical. With regards to forex interventions by central banks, he said there have been mixed results from it, noting that little happened to the Japanese yen when the Bank of Japan stopped intervening. He is of the opinion that interventions have not been successful in the past.