US Dollar Begins Drifting Higher on Risk Aversion

Greenback may be lower against the euro right now, but it is already showing signs of drifting higher as risk aversion makes an appearance. Retail sales data in the United States was disappointing, and now riskier assets are losing ground. That means that the euro may not have the upper hand for much longer.

For now, US dollar is lower, and the dollar index is down. However, the greenback is moving higher against the UK pound, and paring some of its losses against the euro. Risk aversion is likely to make an appearance, thanks to disappointing economic data. US retail sales showed a decline of 0.2% overall, and wholesale-level inflation fell 1% in May. Business inventories climbed 0.4% in May as well. The indications of a slowdown are weighing on risk.
The idea that the US economic recovery could stall out — or even return to a state of recession — is weighing on riskier currencies. The euro may be higher after the risk rally yesterday, but it’s increasingly looking as though that rally was a one-time thing, and the euro could easily fall behind.
At 14:18 GMT EUR/USD is higher at 1.2538, up from the open at 1.2504. GBP/USD is down to 1.5553 from the open at 1.5570. USD/JPY is down to 79.3900 from the open at 79.5335.

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