U.S. Dollar Falls Back in Currency Trading

The U.S. dollar is down to start the week in currency trading on the FX market. The greenback is pulling back against the euro in forex trading as the economic news shows some improvement. Indeed, in the euro zone, things are showing some improvement. PMI is higher than expected in the euro zone, and retail sales contracted less than expected.

The greenback did manage to move higher against the U.K. pound in currency trading, though. A run at 1.60 was rejected, so the sterling is retreating right now. However, the greenback is still struggling for the most part. GFT's Boris Schlossberg reports in FX360 on the G-7 and the risk trade:

Dollar was once again on the defensive at the start of week’s trade after the G-7 communiqué side stepped the issue currency appreciation and risk appetite returned to the European bourses as eco data proved supportive in both EZ and UK.

As long as there is interest in the risk trade, the greenback will fall against the euro in forex trading.

Sterling Moves Lower in Currency Trading

Forex trading with the U.K. pound should consider that the sterling is struggling today. Earlier, the U.S. dollar had moved higher against both the sterling and the euro in forex trading, but things have changed -- at least for the euro.

While the euro is now making headway against the U.S. dollar, the sterling is moving lower in currency trading on the forex market. This is due to the fact that the British economy just can't seem to move out of its funk.

Indeed, even with global equity markets rallying, the sterling remains weak. Government debt and sluggish economic data are pointing to continued difficulties by the British economy, and that is pulling down the sterling. The fact that Gordon Brown is requiring local governments to sell off some of their assets to pay down government debt isn't helping matters, either.