Despite the absence of US liquidity Thursday, the dollar would win back much of the losses it had suffered through the close of the American trading week. While market depth may be shallow, the currency nonetheless maintains its fundamental associations; and the link to underlying risk appetite is the most influential driver for the greenback and the capital markets in general. Catalyzed earlier in the day by what may be the largest sovereign default in eight years, the risk-sensitive asset classes would respond in kind.

Originally posted here:
US Dollar Overcomes Thin Liquidity for a Rebound on Middle East Debt Concern