The dollar rose broadly on Monday, hitting a near two-week high against the yen, as traders trimmed short positions in the U.S. currency following broad losses so far this month.

Against the yen, the dollar rose more than a full percent, after speculative flows pushed it higher in quiet trade in Asia, where markets in Japan, Singapore and other centres were closed for holidays.

In the absence of economic events or data, traders took profits on currencies which have rallied against the dollar, including the euro, up more than 2 percent so far this month.

Analysts said some investors were becoming concerned that short dollar positions were overstretched, suggesting that a near-term correction may be in store.

“There’s already a lot of long euro/dollar positions in the market so it’s difficult to push the pair higher,” said Lutz Karpowitz, currency strategist at Commerzbank in Frankfurt.

Data from the Commodity Futures Trading Commission showed that currency

The yen rose across the board on Friday as a pullback in Wall Street shares and a drop in oil prices negated upbeat U.S. consumer sentiment, rekindling safe-haven demand for the Japanese currency.

The dollar slipped against a basket of currencies, touching a nearly one-year low earlier, as the sell-off continued, on track for its worst weekly performance in more than three months. The greenback also fell to a fresh 2009 low versus the euro, but it recouped most of its losses.

The prospects for economic recovery and low U.S. borrowing rates continued to encourage investors to move cash out of the dollar into riskier assets in other currencies.

“Today we’re getting a little bit more action versus the yen and weaker U.S. stocks are helping,” said Patrick Brodie, chief FX dealer at Sumitomo Mitsui Banking Corp in New York.

The yen typically benefits when there is heightened risk aversion in the market.

“In the

Before I left for my summer break in Greece I asked, among other things, whether Hungary was trying to escape original sin or more specifically (and implicitly) whether Hungary is using the current relatively favorable market environment to claw back control over monetary policy. Recent comments from central bank Deputy Governor Ferenc Karvalits suggest that this may very well be the case (quote below from Bloomberg);

Investors see Hungary becoming “significantly” less risky, allowing for further reductions in interest rates, central bank Deputy Governor Ferenc Karvalits said. “Over the past few months, international risk appetite has improved significantly, the risk assessment of the region and Hungary has stabilized, and this allows for further easing of monetary conditions,” Karvalits said in an interview on Kossuth Radio today.

The Magyar Nemzeti Bank lowered its benchmark interest rate by half

The U.S. stock market has enjoyed a strong rally since the early spring, but while the economy has shown improvement, it still faces major headwinds. So it may be best to hedge against the U.S. dollar, which is likely to experience a significant decline over the next few months.

There are a lot of uncertainties permeating the market right now, not the least of which is healthcare reform. Will that reform entail a public option that could add $1 trillion to the deficit?  How is reform going to be financed?  And is it going to mean higher costs for employers across the board, or just the healthcare insurers?

Investing is made infinitely more difficult when 18% of U.S. gross domestic product (GDP) is hanging in the balance.

And you still have to consider:

The dollar edged up against the euro and yen on Monday in extremely thin trade as Wall Street surrendered earlier gains and traders repositioned themselves ahead of U.S. consumer and housing data due this week.

Solid U.S. and euro zone data and an upbeat assessment on the economy from Federal Reserve Chairman Ben Bernanke over the weekend earlier pushed investors to take on riskier investments at the expense of the the low-yielding yen and dollar.

“Conventional wisdom suggests that major currencies should trade within their recent ranges until liquidity improves after the Labor Day holiday,” said Wells Fargo currency strategist Vassili Serebriakov. “However, there is plenty of data in the U.S. and elsewhere to change that this week, with consumer-related numbers likely to be watched closely.”

Investors are looking ahead to upcoming U.S. and European data to confirm hopes that the world economy is improving.

The dollar was last up 0.1 percent at 94.49

Currencies trade in a tight range again…U.S. Retail Sales are a clunker! RBA’s Stevens is upbeat! Thoughts on Brazil…And Now… Today’s Pfennig!

Good day… And a Happy Friday to one and all! The end of the week… It’s been a tough week for yours truly, as I’ve hobble around in pain all week. But, as I recall, I promised 2 years ago that I would not complain about these things in the future… So! I carry on!

Well… Front and center this morning… The currencies are trading near levels they were when I signed off yesterday morning. They did have a brief rally, after the U.S. Retail Sales data showed some real rot

Obama defends his policies…Commodity currencies should outperform…Global Power Shift Index…And Now… Today’s Pfennig!

Good day… And happy Thursday to everyone! Hope everyone made it through the ‘hump day’ with no worries. We started the morning here with rainshowers, but it ended up being a beautiful afternoon and evening. Currency markets were similar to the weather here, as most currencies started Wednesday in the loss column vs. the US$, but rallied as the day progressed. The dollar had strengthened over the past couple of days due to ’safe haven’ demand; but a surprisingly strong durable goods number (ex autos) combined with an ‘all clear’ signal from President Barack Obama had investors moving back into riskier assets. The commodity based currencies also got a boost as China signaled it would maintain an accommodative policy, easing speculation that the Bank of China would try to rein in bank lending. Lots to cover today, so

The yen rose today as uncertainty about the global economic outlook and forthcoming U.S. corporate earnings increased the safe-haven appeal of the Japanese currency.

Sterling fell as weak industrial output data reinforced doubts about a UK recovery. The euro dipped against the dollar, but losses were capped by a surprise increase in German factory orders that initially pushed it to a session high above $1.40.

When risk aversion rises, investors often cut holdings of stocks and higher-yield currencies and buy back the yen and dollars that were used to finance the trades.

“We’ve been getting very mixed signals, with some positive data and some very poor data, so it’s extremely difficult to pinpoint direction,” said Fabian Eliasson, vice president of currency sales at Mizuho Corporate Bank in New York.

“As a result, people are backing out of high-yield assets and into the yen and dollar. Now, the focus will turn to corporate earnings as

Commodity prices and world stocks rose while the U.S. dollar and government bond prices slipped on Friday when investors cautiously put money back into riskier assets.

U.S. crude pricesraced above $71 a barrel, extending a 2 percent gain the day before, after rebel attacks on Nigerian oil facilities disrupted supply. Firmer oil prices supported metal prices, with gold edging above $940 to a one-week high.

Global equities were also in demand, with the MSCI world equity index advancing 0.9 percent and the pan-European FTSEurofirst 300 up 0.2 percent.

The MSCI world equity index is up more than 21 percent this quarter, on track for the biggest quarterly gain in its 20-year history.

“It is clear that the rebound in global equity markets has lost some steam,” Barclays Wealth said in a note.

“It appears to us that stocks are now broadly fairly valued, having erased their previous undervaluation faster than expected. Further share price gains may

In the currency market, the dollar was hammered against the euro. Late Tuesday, the euro was trading at $1.4089 vs. $1.3864 on Monday. “The stock market and the broader green shoots rally appeared to have lost some momentum last week,” said Michael Woolfolk, of the Bank of New York Mellon. “But it appears that risk aversion is off the table for the time being and players are looking to the FOMC meeting …”

At the conclusion of its meeting today, the FOMC is almost universally expected to leave its fed funds rate target in a range of 0% to 0.25%. However, investors will be watching to see whether the central bank makes any changes to its Treasury and mortgage asset-purchase program, with an eye toward further boosting liquidity.

Also on traders’ radar are the U.S. Treasury Department’s three big note sales this week, says Dan Cook, of IG Markets. “It