Traders are blaming USD/JPY for sparking the mass short-covering bid in the dollar. From 89.65, USD/JPY rallied to 90.08 in just over a minute;s time, traders report. Two US investment banks were very heavy buyers on the move, suggesting leveraged guys may be covering shorts.
Cable has fallen back as the dollar turns bid, now at 1.5875 from spike highs of 1.5928. So much for a quiet Tuesday afternoon.