FX Closing Comments

Outside factors negatively affected the Dollar today, as the EUR/USD surged past 1.2100 with traders worried about the U.S. current account deficit worsening, in response to the UAE's intent to reallocate a portion of their reserves to EUR. Rumors also circulated across trading desks, expressing the fear that Treasury Secretary Snow would be replaced with someone less likely to maintain the administration's "strong Dollar" policy. Increased tension with Iran was also un-helpful to the Greenback. Overnight, watch for Japanese CPI data to shake-up Yen pairs.