Dow sheds but Dollar Rises

Anyone with a fundamental view of the current situation?

For the longest time we have seen dow reaching sky highs but their their currency devalued. So far the biggest winner out of yesterdays drop has been the Yen just like Cesarnc predicted. Then again we'll have to note that Yen has always been volatile and if the trend is technically true, based on its volatility, we could see 250 in a matter of days or a week.

What are the implications for dollar if the stock markets tumble? In Asia, the outlook is still amazingly bullish and investors are taking this chance to do some cherry pickings, economies have not shown any signs of weakening yet, and therefore many are seeing this 'sell period' as a small tremor effect. i only wish i could say the same for the US. AT the time of writing, NIKKEI has shed 400+ points within 10 minutes of market opening, then again its Nikkei, the volatility for Nikkei is nothing new...less price really did close -400 points.

regards
Jest

My guess is that if the stock mrket continues to tumble we'll see a further reduction in bond rates as US based money looks for a local safe haven. Falling bond returns + falling returns on the Dow won't be good for the dollar in the short run. In the longer run it may be all for the good as this sort of thing tends to take money out of speculative activity and put it where it does the most good (manufacturing and production), but that takes months before it shows up. Currently the USD/JPY drop over the last few weeks has been over 500 pips, which wipes out all gains since April on the pair. The DJIA, OTOH, has only lost a few weeks work.

The dollar rate against European currencies is supported by falling gold prices, which brings Australian and New Zealand dollars to correction

For example, we Japanese invest home currency(Yen) here or abroad though, people call it yen-carry trade. People seem to have unwound a trade(liquidation of longs) due to US subprime problems, which led to yen buying.
By the same token, do American invest US dollar at home and overseas(GBP,EUR,AUD,NZD..etc), no? In our opinion, it seems like unwinding dollar-carry trade.