US Dollar Index Recovers Somewhat as Other Majors Show Vulnerability
US dollar index is recovering somewhat today, thanks to vulnerability shown by some of the other majors today. Once again, the euro is showing a degree of weakness in forex trading, as is the pound. The yen, however, is higher against the US dollar today as a measure of risk aversion makes an appearance.
A lot of what is helping the US dollar today is based around the idea that perhaps the Federal Reserve‘s recent announcement about quantitative easing isn’t so bad. Many point out that it makes sense to keep QE3 on the table as long as the US economic recover is sluggish. However, it doesn’t mean that it will be used. As a result, some are rethinking their dollar selling toward the end of last week.
Additionally, with the eurozone back in the spotlight, the euro is faltering again. The upcoming ECB meeting is raising fears of a rate cut. With the eurozone economy slowing and heading toward recession, there is an expectation that the ECB might cut rates in order to give the flagging economy some help. In Britain, the outlook continues to be disappointing as well, and focus on PMI has some cautious.
At 13:18 GMT EUR/USD is down to 1.3221 from the open at 1.3238. GBP/USD is down to 1.6241 from the open at 1.6274. USD/JPY is down to 80.1260 from the open at 1.6274.
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