Believe it or not, this is a good thing. This environment would normally be ripe for sharp US dollar declines, but we're started to see the correlation between risk trends and the currency fall apart.

Focusing on the weak yen, today's price action sho that the currency continues to move in lockstep with risk aversion, and today's increase in investor confidence led the low-yielding yen to plunge 1.4 percent versus the euro and over 2 percent against the British pound and Australian dollar.What was behind the surge in sentiment. Instead, the greenback ended the day up against the Japanese yen, New Zealand dollar, and euro while falling against the British pound, Australian dollar, and Canadian dollar. New Zealand Dollar Down as RBNZ Slashes Rates More Than Expected - Euro Fails to Break Above Resistance at 1.33 Yet Again US Dollar Ends Day Mixed, Japanese Yen Tumbles as Risk Appetite Surge on 'Bad Bank' Initiative Risk appetite was strong on leading the S&P 500 to rally 3.36 percent higher and trigger sell-offs in Treasuries.

According to reports, the Obama administration may be moving toward setting up a “bad bank” in.