Greenback Breaks Out as Spanish Bonds Go into the Drink (UUP) (FXE)
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The U.S. dollar index is pressing fresh highs at 84. The index began the week significantly higher as equity markets broke down, with the DJIA indexes losing 200 points on Monday morning. The move higher for the U.S. dollar comes as Europe's difficulties begin to spin out of control, with Spanish Bond yields blowing-out and equity markets overseas crashing. As a result, global investors a pumping money into U.S. government bonds, which have yields near lows. Despite the low yields, investors are undeterred.
The largest fear gripping markets today involves fears that Spain will need a full scale bail-out. With yields on 10-year treasuries reaching 7.5 percent, many say a bond market lock-out is not far off. If so, Spain will turn to other EU countries, and there could be a cash shortfall in the region, especially if Italy also seeks a bailout.
PowerShares DB US Dollar Index Bullish (NYSE: UUP) is higher by 0.41 percent today. The dollar index reached a 2-year higher today. The EUR/USD, meanwhile, hit a 2-year low at 1.2067.
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The largest fear gripping markets today involves fears that Spain will need a full scale bail-out. With yields on 10-year treasuries reaching 7.5 percent, many say a bond market lock-out is not far off. If so, Spain will turn to other EU countries, and there could be a cash shortfall in the region, especially if Italy also seeks a bailout.
PowerShares DB US Dollar Index Bullish (NYSE: UUP) is higher by 0.41 percent today. The dollar index reached a 2-year higher today. The EUR/USD, meanwhile, hit a 2-year low at 1.2067.
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