Weak economic data as well as the assassination of Pakistan’s former Prime Minister Benazir Bhutto sent the US dollar tumbling.

The primary reason why carry trades have thrived over the past few years is because volatility fell to a record low. The multi-decade highs that investors have grown accustomed to will be much more difficult to achieve as everyone becomes more careful with their investments.

The dollar’s slide came to a screeching halt. The question now is will the turn in the dollar last or will the weakness resume in the New Year.

The Canadian edition of Time magazine has named the Canadian dollar their Newsmaker of the Year.  Is this a testament to how popular currencies have become?

A shift in risk appetite is the real driver behind the US dollar's comeback.

Traders showed limited reactions to the fresh real estate data and remained similarly unmoved despite the noteworthy monetary policy developments and overall outlook for the US economy expressed by Fed officials.

The US dollar continued to rally to fresh two-month highs against the euro and other major currencies, as traders showed little willingness to hold onto dollar shorts ahead of year-end celebrations.

A number of factors can be attributed to the rally, such as strong consumer prices, Lufthansa’s purchase of a stake in JetBlue and overall risk aversion. The most important thing is that the consumer is not giving up, which reduces any chance of a recession next year.

Today’s US PPI and Retail Sales data make it hard to believe that a recession is probable. The US consumer, who is the backbone of the economy, continues to spend voraciously.

A morning announcement by the US Federal Reserve and other major central banks forced large corrections across risk-sensitive asset classes, as the monetary policy authorities outlined plans to ease current credit market crises.