US dollar is heading higher today, surging ahead of its high beta counterparts as improved economic data is reported, and as risk appetite flees in the wake of disappointed ECB hopes.
Greenback has the upper hand today against high beta currencies as the situation becomes more interesting. Hopes about action from Mario Draghi and the ECB are starting to fade. It seems clear that no one in the eurozone is going to act unless forced into it by circumstances. And the circumstances just aren’t there yet.
The situation in the United States stands in contrast to what’s happening in the eurozone. The US trade deficit narrowed in June, with the gap between imports and exports narrowing to $42.9 million. This is the smallest the gap has been since December 2010. On top of that first-time jobless claims dropped unexpectedly, moving down by 6,000 for the week that ended August 4.
With a reasonably strong economic performance, and expectations that Quarter 2 GDP will be revised upward, it is little surprise that the US dollar is in demand as high beta currencies struggle.
At 13:24 GMT the US dollar index is up to 82.659 from the open at 82.313. EUR/USD is down to 1.2291 from the open at 1.2366. GBP/USD is down to 1.5612 from the open at 1.5656. USD/JPY is up to 78.6450 from the open at 78.4350.
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