The buck lost more ground against the majors as risk taking remained in vogue for the better part of the NY session. Better than expected US existing home sales along with some positive corporate earnings surprises kept US equities in positive terrain – with the S&P 500 closing up a modest +0.56% on the day. Bonds were also sold and yields for both the 2-year and 10-year ticked up a little over 2 basis points. The only fly in the ointment was the rally in gold prices, which settled near $910/oz and the highest level since early August. Investors are ostensibly turning to gold as the world's third currency in light of continued deterioration in global economies.

EUR/USD rallied a sharp 160 pips into the 1.3180 area. The 1.3200/10 zone looks like the next critical barrier to upside and this level contained the gains in NY trading.  Look for a move below 1.3150 overnight to usher in accelerated weakness.  USD/JPY slipped -15 pips to 89.00/05 despite the overall bid tone to stocks and higher yields, in a sign that USD weakness prevailed. EUR/JPY on the other hand jumped more than 120 points and was sitting near 1.1730/40 ahead of the close. If that wasn't enough indication of the buck's slide today, USD/CHF collapsed more than -175 pips towards the 1.1370/80 area.

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