Stocks rebounded today, taking carry trades higher in the process, as central banks around the world continued to inject liquidity into the financial markets.

It has been a busy week in the financial markets with two to three hundred point intraday swings in carry trades and the Dow quickly becoming the norm.

Volatility rocked the markets as the Dow plummeted as much as 340 points intraday before reversing to settle down only 15.69 points. Today’s move is nothing short of impressive and suggests that at least for the time being, US stocks and carry trades have hit a short term bottom.

It appears that no Federal Reserve Chairman is able to escape the first year curse. Although we are a few months beyond the first year mark of Ben Bernanke’s term, the current credit crunch has been slowly gnawing at the economy since the beginning of the year.

Big moves in the US stock markets are driving major losses in carry trades.

The meltdown in the financial markets continued as stocks finished down over 200 points, bond yields continued to slide and the US dollar rose as traders flocked to the safety of the mighty buck.

The US Dollar started out the week stronger against most of the majors, as better-than-expected retail sales helped quell fears that the subprime contagion would lead consumption growth to stall.

It was another rocky session for the equity markets, which meant further volatility for the US dollar in the foreign exchange realm.

Today’s turmoil in the financial markets has put traders, analysts, and even central bankers in shock.

Both the US dollar and bond prices have sold off drastically on news of China’s threat to dump US Treasuries and US dollars.