US Dollar Down on Optimism

Optimism is high regarding the upcoming G20 meeting, and that is sending the US dollar lower in Forex trading. Greenback is lower today as economic data boosts hopes, and as Forex traders shrug off the latest downgrade of Spain’s sovereign debt.

Since the US dollar has been used as a safe haven recently, it is little surprise that the greenback slides in currency trading when things start looking better. Indeed, with hope once against kindling for the containment of the sovereign debt crisis in Europe, there is much for the US dollar to do.
Earlier this week, France and Germany agreed on a bank plan, and there is G20 meeting coming up. Far from dashing the hopes of sovereign debt containment, the Spanish downgrade seems to have Forex traders hoping that it will galvanize world finance leaders into taking substantial action.
In the US, retail sales came in better than expected, and that is providing some hope that consumers are ready to spend again, helping the US economy. September saw the biggest increase in retail sales in seven months — 1.1 percent — as auto sales, clothing and home furnishings led the pack. Unemployment claims were down for last week, also helping fuel optimism.
For now, risk appetite is on the rise, as Forex traders look for higher yielding assets, selling the US dollar in favor of high beta currencies. At 13:00 GMT, EUR/ESD is higher at 1.3807, up from 1.3778 at the open. GBP/USD is up at 1.5777, from 1.5767. and USD/CAD is lower at 1.0134, dropping from the open at 1.0209.

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