US dollar is pulling back today, heading lower as risk appetite makes an appearance in the markets. Even though anti-austerity protests continue throughout Europe, and even though uncertainty remains in the markets, a bit of risk is becoming apparent, and that is weighing on the greenback.
There is hope for Spain’s new 2013 budget, due to be presented today. As a result, the euro has the upper hand, and the US dollar is heading lower. It is widely expected that Spain’s budget will impose austerity measures that will make it eligible for a bailout from the ECB’s European Stability Mechanism.
Greenback also continues to be the focus of an unlimited quantitative easing program. Even though there is a great deal of uncertainty in the markets, the truth is that Forex traders know that the Federal Reserve can “turn on” more asset buying at any time. The monetary policy being adopted by the United States right now plays into dollar weakness, and there is expected to be a lot of that whenever a measure of optimism shines through.
At 12:54 GMT EUR/USD is up to 1.288 from the open at 1.2874. GBP/USD is also higher, moving up to 1.6234 from the open at 1.6165. USD/JPY has moved lower, heading down to 77.6140 from the open at 77.7415.
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