The US dollar is pulling back as the situation in Europe stabilizes somewhat. Risk appetite is making an appearance, and the US dollar isn’t needed — for now — as a safe haven. As a result, it is down pretty much across the board.
Things are stabilizing in Europe as the Italian Senate moves closer to passing austerity measures. Between that, and the efforts made by the ECB to keep Italian bond yields from spiraling too high, things are looking a little bit better in Italy. Plus, some consider it a bonus that prime minister Silvio Berlusconi will step down when the austerity budget passes.
In Greece, a new prime minister has been selected: Lucas Papademos. Papdemos was, at one point, the
In both cases, the addition of stability has made it seem safer to Forex traders to abandon the US dollar in favor of higher yielding currencies. Plus, US economic news is showing some reasonable improvement, which should further add to risk appetite.
At 15:07 GMT EUR/USD is higher at 1.3687, up from the open at 1.3706. GBP/USD is higher at 1.5993, up from the open at 1.5935. USD/JPY is lower at 77.2095, down from the open at 77.6490.
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