At her testimony yesterday, Fed Chair Janet Yellen came across as more dovish than expected. The dollar fell sharply as investors were reminded that future rate rises will be rather gradual. Stock markets love low-interest rate levels and for that reason, they were able to rise sharply which lifted the Dow to a new all-time high. Investors also liked the look of the latest Chinese trade figures that were released overnight.
Another day in Europe is coming to an end, and those who like volatility were not left disappointed with the euro and pound making sharp moves as speculators responded to fresh rumors and comments from central bank officials.
The tide is turning: central banks are finally in the process of ending their extraordinary loose monetary policy stances that had been originally established in response to the global financial crisis and the economic slump that ensued.