FX Week

Dollar volatility rockets over terror fears

Although the attack was in Europe, the fallout has been largely against the dollar, as the US is seen as the target of terrorism, said Chris Gothard, currency strategist at Brown Brothers Harriman in London. This will lead to a continued flight from the dollar, despite its recent mini rebound, as threats and rumours plague the market, he said.

The heightened sensitivity of the market to news and rumours will also lead to severe uncertainty on the outlook for the dollar in the coming months.