US dollar was softer earlier, thanks to a degree of optimism that had Forex traders looking for higher yields. However, the markets are quite ready for true optimism and the dollar has since strengthened against high beta currencies.
One of the reasons the US dollar is gaining some strength right now is due to concerns that are, once again, creeping in about the state of the global economy. Some of the earlier optimism about what can be accomplished in Europe is fading, and there are still concerns about what’s next for the economy in the United States.
Also, it isn’t helping that Australia’s monetary policymakers are concerned enough about the current situation that they have cut interest rates again. This is the second rate cut in two months for the Reserve Bank of Australia, and many see this as a sign that there is still a long way to go — especially if the eurozone fails.
So, for now, the US dollar is slightly higher against high beta currencies like the euro, pound and Aussie, and lower against the yen.
At 14:41 GMT, EUR/USD is down a little bit to 1.3374 from the open at 1.3398. GBP/USD is down to 1.5611 from the open at 1.5648. AUD/USD is lower at 1.0221, down from the open at 1.0270. USD/JPY is lowr at 77.7700, off from the open at 77.8200.
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