US Dollar Index Retains Modest Gains

US dollar index is retaining its earlier modest gains today as risk aversion sets in. Concerns about the Greek drama playing out, as wells concerns about the state of the global economy, are weighing on riskier assets. Greenback is being sought as a safe haven, with the US dollar index likely to pick up steam.

Although the economic recovery in the United States continues to move slowly, it is still moving. The NFIB small business index is coming in at a high not seen since the end of the recession. Additionally, CoreLogic reports that home prices showed their first monthly increase since July 2011 in March, gaining 0.6%. The news is comforting many who are turning to the US dollar for safe haven right now.
Indeed, as things become increasingly dicey in Europe, the US dollar is preferred. The US dollar index is on the rise. Modest gains were seen earlier, but as the financial markets worry about Greece, gains are expected to accelerate. Greece’s key party has failed to form a government, and there are concerns about the ability of the Greeks to put together a government — especially one that will adhere to bailout austerity conditions.
At 14:31 GMT EUR/USD is down to 1.2995 from the open at 1.3052. GBP/USD is down to 1.6129 from the open at 1.6190. The dollar index is higher at 79.830, up from the open at 79.585.

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