U.S. Dollar Rallies on Dubai Debacle

The U.S. dollar is rallying right now in currency trading on the FX market as the news out of Dubai sends all thoughts of risk out the heads of investors. Investors had been hoping for a good day today on Wall Street, but optimism over the biggest shopping day of the year, Black Friday, has been completely overshadowed by the Dubai debt crisis.

Dubai World Conglomerate plans to ask its creditors to allow it to stop making payments for six months while it restructures. This news is a huge blow, since Dubai has represented a great deal of global economic activity. This is an especially hard blow for emerging markets.

As a result, the greenback in surging in forex trading as investors look for a safe haven. Forex traders are in no mood for risk today, and are showing it. The risk trade has been completely abandoned for now, as traders look for capital preservation in the safety of the world's most stable and reliable currency. 

The dollar's strength also has commodities falling, as downward pressure is applied to oil and gold, both of which often move inversely to the greenback in forex trading. It will be an interesting day today, and it remains to be seen whether the weekend, with its closing of the markets, will give forex traders a chance to evaluate their response, and see whether the U.S. dollar is able to maintain gains in currency trading next week.