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US Dollar Drops as Risk Appetite Returns on Economic Data
There is a bit of enthusiasm in the markets today, as the Dow Jones Industrial Average reaches an all-time high, and as risk assets in general see demand. In this climate, there isnít much demand for the US dollar, so the greenback is heading lower against most of its major counterparts.
One of the helpful bits of information was a better-than-expected eurozone PMI report. Markit reports that February PMI came in at 47.9, rather than the estimated 47.3. This still indicates that the eurozone is in a state of contraction, but in the current situation, many are ready to take it. Retail sales in the eurozone also showed a surprise to the upside.
With the eurozone doing better than expected, itís little surprise that risk appetite is making an appearance. Also weighing on the US dollar is the fact that many Forex traders are now remembering that there is a QE-Infinity situation going on, with the Federal Reserve still involved with monthly asset purchases.
At 15:30 GMT EUR/USD is up to 1.3045 from the open at 1.3025. GBP/USD is up to 1.5150 from the open at 1.5115. USD/JPY is down to 93.1500 from the open at 93.4800.