While focus may have been (and still is) on the yen and the Swiss franc and their respective fresh lows the dollar did notch up some decent gains yesterday too. Flight to safety was the name of the game yesterday as fears surrounding the European banking system were resurgent weighing heavily on sentiment and ending the bright start to September. Gold also was on the move yesterday, reaffirming our belief that a broad flight to safety is underway since players get spooked as soon as any mention of concerns regarding European banks is mentioned. The dollar has lost a little ground in Asia as players have continued to press the yen and franc to these aforementioned lows but we maintain that as long as investors are seeking safety the dollar will keep an underlying bid tone.

As was largely expected trade on Monday was very subdued with the US close for a holiday and liquidity severely limited as a result. The index remained for the most part in a 20-point range as traders waited for liquidity to return to normal and sent most major currencies sideways. Early in Asia we have seen the dollar climb quite sharply as the euro lost a significant amount of ground in opening trades. The Bank of Japan and Reserve Bank of Australia both kept their interest rates on hold as was largely expected but have failed to materially factor into price action.

The dollar index extended its weekly decline on Friday after a better than expected jobs report in the US lifted equities at the cost of safe-haven assets. Unfortunately at present for the dollar the only attraction is that of safety, since the US economy’s future remain very uncertain and therefore the dollar has not been seeing bids from speculators better on interest rate hikes. On any occasion when there is firmer data, even from the US, lifting sentiment the dollar is likely to suffer until the US puts a string on solid data releases together suggesting that the economy may finally be gathering some real momentum toward recovery.

(RTTNews) -  Following the release of Commerce Department's factory goods orders for July and the National Association of Realtors' data on pending home sales at 10:00 AM ET, the US dollar showed mixed trading against its major counterparts.

While the greenback edged slightly higher against the yen and the Swiss franc, it held steady versus the euro and pound. Currently, the dollar is quoted at 1.5372 against the pound, 1.0133 versus the Swiss franc, 1.2805 against the euro and 84.42 against the yen.