The U.S. dollar weakened today on the signs that the economic recovery in the U.S. might slow and as the European fiscal system showed the signs of recovery, damping the appeal of the U.S. currency as the safe haven.

The initial jobless claims unexpectedly increased to 472,000 from 459,000, while the forecasts promised the decline to 454k. The manufacturing sector continued to grow during June; however, the rate of growth as indicated by the ISM PMI, which dropped to 56.2% in June from 59.7% in the month before, slowed when compared to May. The Pending Home Sales Index dropped 30.0% in May, after it rose 6.0% in April. The reading was horrendous compared with the expected decline to 7.4%.

The outlook for the U.S. economic growth in the second half of the year remains much more pessimistic than in the first half. This outlook greatly reduces the attractiveness of the dollar-denominated assets.

EUR/USD traded near 1.2475 as of 18:06 GMT after opening at 1.2235. GBP/USD trader at 1.5116 after it opened at 1.4943. USD/JPY fell to about 87.62 from its opening level of 88.43.

If you have any questions, comments or opinions regarding the US Dollar, feel free to post them using the commentary form below.