US dollar index reversal extends
The US dollar index (UUP), which measures the strength of the US dollar against a basket of major currencies, continued to trade higher on June 10, 2016. The rise in the US dollar was primarily attributed to investors turning bullish ahead of the Fed meeting on June 14. As the US dollar is considered one of the safest assets in terms of currencies, the Brexit worries also resulted in more investors turning long on the US dollar.
Recent gains in the S&P Index have been primarily driven by commodity prices, which have a strong inverse correlation to the US dollar. Commodity prices also saw a sharp dip on June 10 as the crude oil futures fell by a significant 3.3%. You can read about the recent trend reversal in Does the Rising US Dollar Index Signify an Upcoming Trend Reversal and Domino Effect?
Most Asian currencies fell, but yen rose
Major Asian (AAXJ) currencies were trading lower against the US dollar on June 10, 2016. The fall was led by the Australian dollar (FXA), which fell by 0.74% as commodity prices fell. The New Zealand dollar fell by 0.68%.
The dollar-yen currency pair, which is inversely related to the Japanese yen, fell by 0.08%. Investors have always considered the yen to be a safe-haven currency. Thus, with the increasing uncertainties surrounding the Brexit, it was no surprise that the yen rose. For more details on the safe haven behavior of yen, refer to Japanese Yen: The Safe-Haven Currency for Decades.
Pound and ruble led the fall
European currencies (FEZ), which form a major part of the US dollar index, continued to trade on a negative bias on June 10 with all major currencies falling against the dollar. The dollar-ruble currency pair fell by 1.5% after the heavy correction in crude oil prices. The losses were less compounded in the common currency, as the fall in the euro (EUO) was relatively lower at 0.58%.