US dollar index is slipping today as Forex traders find risk appetite, even though there is little good news coming out of Europe. Instead of seeing risk aversion today, there is a bit of risk appetite, and that is sending the US dollar lower against its major counterparts. Also weighing on the US dollar is the possible of an extension of Operation Twist.
US economic data continues to offer a mixed bag, showing sometimes-encouraging results which are balanced out by disappointments. What is clear, though, is the fact that the US economy isn’t recovering at the pace expected. And, interestingly, there is a little bit of hope right now for the eurozone. In spite of not having a plan to contain sovereign debt contagion, and in spite of growing bond yields in Spain and Italy, the euro is getting a boost.
Some of that boost, though, may not be entirely due to risk appetite. There is speculation that the Federal Reserve will extend Operation Twist in its June meeting, even though no one expects QE3 to start anytime soon. That continued monetary easing could be one reason the dollar index is struggling today.
At 14:32 GMT dollar index is down to 81.971 from the open at 82.148. EUR/USD is up to 1.2595 from the open at 1.2558. GBP/USD is up to 1.5548 from the open at 1.5505. USD/JPY is down to 79.2685 from the open at 79.4845.
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