Dollar getting crushed; More lenders pulling back

Things are really starting to get hairy now ...

* The Dollar Index, a measure of the greenback's value against six major currencies (euro, Japanese yen, British pound, Canadian dollar, Swedish Krona, Swiss Franc), is rolling over sharply amid U.S. credit quality fears. It was recently down 0.66% to 80.125, putting an end to the short-term bounce we had seen. The low to focus on is 80.016, set on 7/24.

* The most important currency to focus on, though, remains the yen. If it takes out the intraday low from a few days ago (117.61), we could be in real trouble. That's because the yen is a good barometer of overall market risk appetite. If that level gives way, you could see this selling squall turn into a hurricane.

* More lenders are weighing in with tightened guidelines. Per this Bloomberg story, Wells Fargo has stopped making Alt-A loans through brokers ... Wachovia has stopped making Alta-A loans through brokers ... AmTrust Financial has stopped making jumbo loans at LTVs above 95% ... and National City has cut back on second mortgages and stated income loans.