Forex - Dollar rallied to a 6-month high on raising concerns of recession in euro-zone

The Dollar has extended its rally of the past month, touching a 2008 high against a basket of currencies on the view that economic weakness, once US, is spreading globally. A jump in US consumer confidence in August to 56.9 vs 51.9 added to the Dollar advance. US housing data had little impact on Dollar trading. And investor did focus later on the release of the minutes of the last FOMC meeting.

The Ifo German business climate index for August fell more than expected to a three-year low of 94.8 vs 97.5, while German GDP
contracted in Q2 for the first time since 2004.

Ongoing worries that other countries are vulnerable to US economic weakness and views about the health of the financial services industry prompted investors to bail out of risky trades in higher-yielding currencies such as Australian and New Zealand Dollars.