What’s Next for the US Dollar?

US dollar is lower today as a touch of risk appetite returns to the markets. The prospect of a fiscal cliff deal is helping to support high beta currencies, and there are also concerns about more easing for the US dollar in the first quarter of 2013.

Right now, there is a bit of optimism floating around regarding a resolution to the fiscal cliff issues. With President Barack Obama heading back from his Christmas holidays early, there are hopes that a solution can be found before the end of the year. As a result, risk appetite is making an appearance, and that is sending the US dollar lower on the Forex market. Concerns about what’s next for the US dollar are rather high, with risks coming in quarter one of 2013.
Not only is risk appetite weighing on US dollar performance a little bit, but the prospect of more easing for the greenback isn’t helping much. The US dollar index is lower today as Forex traders contemplate the future, and that future likely means more stimulus from the Federal Reserve in the coming months.
At 14:16 GMT the US dollar index is down to 79.628 from the open at 79.687. EUR/USD is up to 1.3208 from the open at 1.3181. GBP/USD is up to 1.6142 from the open at 1.6126. USD/JPY is up to 85.3450 from the open at 84.7500.

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