US Dollar Weakens as Risk Appetite Makes a Cautious Appearance

  March 23rd, 2012 at 13:30, Miranda Marquit

A sheet of US 100-dollar bills up to the horizonUS dollar is weakening today as risk appetite makes a cautious appearance in the markets. Yesterday, greenback was higher, and gold prices reached a low not seen for 10 weeks. Today equities are still struggling, but higher gold is helping the euro against the US dollar, and some Forex traders are looking for risk.

Some of the fears surrounding economic growth in the eurozone and in China have eased somewhat, and that has provided some of the high beta currencies a little boost today. Euro is benefitting as fears about the eurozone ease somewhat, and as gold prices rise.

However, some think that the US dollar will return to strength again soon. The troubles in the eurozone still have not been completely resolved, and the outlook in the United States continues to strengthen. Expectations for better economic performance are likely to help support the greenback — especially when the performance of the US economy is compared to the eurozone economy.

For now, though, a small amount of risk appetite is present in the Forex market. It may not last long, though, especially if other riskier assets, like equities, continue to struggle.

At 13:27 GMT EUR/USD is up to 1.3242 from the open at 1.3198. GBP/USD is up to 1.5840 from the open at 1.5814. USD/JPY is lower at 82.3925, down from the open at 82.5780.

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

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