US Dollar Index Declines as Cautious Optimism Makes an Appearance

US dollar index is lower today, declining as better news encourages cautious optimism and improves risk appetite. The greenback is lower against the euro on better news out of the 17-nation currency region, as well as encouraging news about consumer spending in the United States.

The US dollar index is a little lower today, falling back on the last day of the first quarter of 2012. Against the euro, the US dollar is down as Spain announces its new budget (complete with a 120 billion euro cut), and as leaders announce that the EFSF and ESM combined will raise their limit to 800 billion euros for a short time.
In the United States, there is some hope derived from the increase in consumer spending seen in February. Reports are that consumer spending increased by 0.8%, which was better than expected. Even though personal incomes didn’t rise as much as expected, the increase in consumer spending nonetheless sparked some hopes that maybe the US economic recovery could get well underway.
The cautious optimism is helping the euro against the US dollar as Forex traders look for higher yields. The dollar index is lower at 79.07, down from the open at 79.29.
At 14:20 GMT EUR/USD is up to 1.3340 from the open at 1.3306. GBP/USD is up to 1.6007 from the open at 1.5958. USD/JPY is lower at 82.3400, down from the open at 82.4600.

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