US dollar index erases 2% loss and soars to 1-week highs

On a volatile session, the US dollar index made a dramatic reversal, rising almost 3% from daily lows. Stocks and bonds yields also reversed sharply. 

The index which gauges the US dollar against its main rivals, bottomed at 95.85, the lowest level since October 4, during the Asian session after the unexpected victory of the Republican candidate in the US presidential election. 

Afterward, rebounded sharply trimming losses and following the beginning of the American session it resumed the upside and broke above 98.00. The rally continued to 98.50, where the index reached the highest level in a week. 

The intense recovery of the US dollar particularly against the euro and the yen boosted the index, that in a few hours rose 2.75%, from monthly lows to weekly highs. Near the end of the session ti was holding around 98.50, level unexpected 12 hours ago, when the votes in the US started to favor Trump. 

Stock and bonds also reversed

Dow Jones futures plummeted during the Asian session hitting monthly lows under 17,500 but then reversed dramatically and continues to rally in New York. From the lows, it rose more than 1,000 points and broke above 18,500 approaching to all-time highs. 

As stocks soared, US bond yields rose sharply with a significant steepening of the Treasury yield curve. The 10-year rose to 2.05% for the first time since January. Volatility in the stock and the bond market are likely to remain high during the next days, after Wednesday’s sharp moves. 

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