US Dollar Pulls Back as Risk Appetite Makes an Appearance

After a few days of gloom over Europe, risk appetite is making an appearance in the financial markets. US dollar is pulling back from recent highs against the euro and the pound, and heading lower as Forex traders look for a little extra yield, and as a degree of optimism is seen as moves are made to shore up Spain.

US dollar was headed higher today, moving up as news about Great Britain’s economy disappointed. However, the Bank of England put quantitative easing on hold, and it appears that the body is prepared to maintain that position. So, even with the British economy in recession, the pound is getting a slight boost against the US dollar.


Against the euro, greenback reached a three-month high. Uncertainty about Greece continues, and worries about the relationship between France and Germany have been weighing on the euro. The 17-nation currency has found support, though, and is heading higher right now, as Spain moves to shore up its flagging financial sector.

The latest jobless claims data in the United States shows a drop of 1,000. The news is disappointing, but for now there is enough cautious optimism for risk appetite to help some of the high beta currencies.

At 12:47 GMT EUR/USD is up to 1.2957 from the open at 1.2930. GBP/USD is up to 1.6169 from the open at 1.6128.

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