Dollar Back On The Defensive Versus Most Majors

Sponsored Links

The dollar weakened versus most other major currencies Friday morning as US stock futures rose on increasing optimism that the economy is in recovery mode.

Increased risk appetite and concerns about US government spending have hurt the dollar versus higher-yielding counterpart such as the euro.

A modest comeback earlier in the week pared some of the buck's recent losses, but it appears that renewed confidence in the global economic recovery may continue to weigh on the safe haven dollar.

Traders await the advance estimate of second quarter GDP, which is likely to confirm that slump in the economy slowed down in the Apr-June period.

Friday morning, the dollar slipped to 1.4150 versus the euro, moving away from a 2-week high near 1.4000 and back toward its 2009 low of 1.4338, last tested on Monday.

Meanwhile, the dollar extended its losses from the previous session versus the sterling, dropping to a weekly low of 1.6574 before finding support. With the loss, the dollar moved to the lower end of a 2-month trading range.

The dollar also came under pressure versus its red-hot rival from north of the border, slipping to C$1.0780. Following a brief recovery attempt mid-week, the dollar appears poised to test a 10-month low of $1.0749, set on Monday.

On the flip side, the dollar rose versus the slumping yen, climbing to 95.77 and challenging yesterday's nearly 4-week high of 95.87.

Friday, Eurostat said in a report that Eurozone jobless rate stood at 9.4% in June, up from 9.3% in the previous month, which was revised from 9.5% reported initially. This was the highest jobless rate since June 1999.

Also, a flash estimate from the Eurostat showed that consumer prices in the euro area dropped 0.6% in July from the previous year compared to a 0.1% drop in June. Annual inflation had turned negative for the first time on record in June.

(Market News Provided by RTTNews)