The US dollar made a big turnaround in Europe to recover Asian session losses. A sharp jump against the Swiss franc led to dollar strength against most major counterparts.
The greenback jumped almost 1% versus the swissie to hit a five-year high of 1.0326, the highest since August 2010. While there were no reports of an intervention by the Swiss National Bank in the currency markets, there was speculation that the SNB may respond to the anticipated easing from the European Central Bank next week. The euro rallied to a six-week high against the Swiss franc to reach 1.0924.
As a result of a stronger dollar, the euro fell sharply against it to below the key 1.06 handle, reaching 1.0567, not far from a seven-month low hit earlier this week. US and Eurozone interest rate spreads remain wide and supportive for the greenback.
The dollar rebounded against the yen to recoup earlier losses and bounced from 122.29 to 122.77 yen. The strong dollar hurt gold, which tumbled to 1052.59 down $13 today. Sterling fell close to a seven-month low and touched 1.5030.
Economic data releases today included Eurozone economic confidence survey for November and UK GDP. Eurozone economic confidence index for November was unchanged at 106.1, the highest since 2011 and above expectations. The second estimate of Q3 GDP for the UK came in at 0.5% q/q and 2.3% y/y, both in line with expectations.
This data had little market impact as the main focus of the currency markets is the upcoming risk of the ECB policy meeting and Fed Chair Janet Yellen comments on December 3 and then US nonfarm payrolls data on December 4.
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