European data released earlier is disappointing, and concerns about the situation are prompting gains for the US dollar. Even though the US economy is recovering at a sluggish pace, and even though the sequester has hit, the US dollar is still in a stronger position than its European counterparts.
Greenback is higher so far on the first day of the budget sequester. For the most part, US dollar is being seen as a safe haven. With disappointing economic data out of the United Kingdom and the eurozone, the greenback is in demand.
In Britain, the latest Purchasing Managers Index showed more contraction for the economy. In the eurozone, disappointing PMI data for Italy was released (on top of all the political issues), and the eurozone unemployment rate pushed up to 11.9 per cent. Levels in Spain are at 26.2 per cent. Between Spain and Italy, there is a fresh reminder that all is not well on the eurozone periphery.
With all this gloom and doom from across the Atlantic, it is little surprise that the greenback has the upper hand today, even with the difficulties facing the United States. At least the US economy is still growing.
At 13:38 GMT US dollar index is up to 82.304 from the open at 81.932. EUR/USD is down to 1.3005 from the open at 1.3057. GBP/USD is down to 1.5018 from the open at 1.5165. USD/JPY is up to 92.6995 from the open at 92.5650.
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