Risk appetite is returning to the markets after risk aversion was the story yesterday. As risk appetite returns, the US dollar index is heading lower. Demand for higher yielding assets is on the rise, and the greenback isn’t keeping up as a result.
It’s been an interesting few days on the world stage, and the issues in Ukraine are far from solved, although the receding prospect of war is adding to risk appetite. US dollar index is dropping as Forex traders look for yield. Against European currencies, the dollar is dropping. This impacts the dollar index, since the euro is the currency with the heaviest weight in the basket.
Another interesting development is that one of President Putin‘s aides suggested that a response to threatened US economic sanctions over Ukraine could be for Russia to drop its dollar reserves and refuse to repay loans from US banks. Many are dismissing the remarks, though, since they came as opinion, and aren’t official.
At 15:12 GMT the US dollar index is down to 80.0120 from the open at 80.0790. EUR/USD is up to 1.3752 from the open at 1.3730. GBP/USD is also higher, moving up to 1.6680 from the open at 1.6657. USD/JPY is up to 102.0540 from the open at 101.3945.
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