USD Gains As Investor Sentiment Evaporates

The regional European markets plunged throughout the session, with the major indexes falling as much as 3%, while the currency market pushed towards new yearly lows. All this has been caused by a market that is constantly looking to shed risk and buy assets seen as safe, such as U.S. Treasuries and the U.S. dollar.
The currency market has really only had one trading direction since the beginning of December and that is USD long/everything else short.
Problems in the Euro-area are a major destabilization factor for the global economy and this is currently being priced in by financial markets. If things turn out to be much worse in the Euro-area the global economy will probably experienced a double dip recession, and that is what is being priced in right now.

Various rumors are spreading throughout Europe, which eventually could lead to a deterioration of current situation. To counter this, the chances are that key politicians will organize press meetings, which eventually will led to sudden moves in the currency market. Traders should expect to see gaps at the Sunday open.