Dollar Trounced On Global Economic Recovery Optimism

Overall: The same old story continues to repeat itself. As economic releases give evidence that the global economic recession is close to a bottom, traders become bullish on riskier assets and sell the dollar. The majority of economic releases, from every region, have been positive recently leading traders to speculate the worst is over and become risk tolerant. On Friday the dollar weakened significantly across the board, dropping against all of the other major currencies. The euro led the way against the greenback, and the other majors followed suit, after it was reported that South Korea’s National Pension Service, which had $187 billion of assets at the end of 2008, announced it had pared its allocation for U.S. Treasuries over the next five years.