US Dollar Drops on Economic Concerns

Greenback is heading lower today, dropping as economic news softens and results in speculation that the Fed’s taper won’t move forward at a rapid rate.

The latest weekly unemployment claims data in the United States shows a slight increase, and that is weighing on the greenback right now. The US dollar is down against its major counterparts as softer economic data is poised to raise questions about the progress of the Federal Reserve taper.
The Fed began its tapering this month, but with the soft economic data, the current level might be maintained for a little bit longer before the next step down. Fed officials want to make sure that they feel the economy is on solid footing before they tighten monetary policy too far by expanding the taper — and especially before they get to the point of raising interest rates.
For now, the dollar is likely to struggle a little bit. However, other economies aren’t faring as well, and after this hiccup, and the profit taking that comes with it, there is a chance the greenback will rise again.
At 14:00 GMT EUR/USD is up to 1.3666 from the open at 1.3547. GBP/USD is up to 1.6613 from the open at 1.6578. USD/JPY is down to 103.7155 from the open at 104.4945.

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