USD dominates the European session market
Dollar index jumps more than 1%
Investors are getting ready to open trading for the NY session
The US dollar unexpectedly showed strength in the European session by bouncing higher than most of the major currencies.
The surge may have been driven by market demand for a safer US dollar after returning from the long New Year's weekend off.
Market movements in the New York session are expected to be more agile with the opening of the Wall Street market on the first day of trading in 2023.
Examining US dollar trading in the European session, the dollar index jumped more than 1% to a price level of 104.70, rising further from the 6-month low it touched earlier.
Meanwhile, at the same time the yen also appreciated compared to most of the major currencies although it slumped against the stronger US dollar.
Earlier in the Asian session, the yen hit a 7-month high against the dollar following speculation that the Bank of Japan (BOJ) will emerge from loose bottoms.
Also contributing to this is concern over the dim prospects of the International Financial Savings Fund (IMF) that the world economy will face a more difficult situation in 2023.
On the tail of the greenback's rise, trading in other major currencies plunged as the New Zealand dollar led the slide by dropping 1.7% while the Australian dollar lost around 1.4%.
Switching to European currencies, the euro lost about 1.2% while the pound sterling fell about 1.1% in early European session dismal trading.
Overall, investors need to be careful amidst the erratic market movements following high volatility in early trading in 2023.
