DailyFX Research Team
The dollar index once again found itself being brutally beaten down yesterday as risk appetite soared and investors bought into riskier FX and other asset classes. The rout got started early as Euro-zone and UK factory activity came in better than expected allaying fears of a double dip in the global economy. This run on positive data was bolstered by some not-as-bad-as-expected data from the US in the form of ISM manufacturing. Global equities also got a firm kick-start to the month as European bank earnings came in much stronger than expected helping to lift sentiment regarding the European banking sector. As risk appetite roared on the dollar was slammed across the board, additional concerns regarding further quantative easing in the US added to the weights dragging on the dollar. As trade as worn on in the Asian session bulls have run out of steam to push equities and FX higher and thigns have tapered off a little as assets consolidate some of their massive gains from yesterday.
Looking ahead, risk appetite should remain well supported going into the European session, we may see the index claw back some ground as a bulls take a breather awaiting further cues to send currencies higher. A piece in the WSJ over-night suggesting further loosening of policy in the US is likely to be discussed at the next FOMC meeting will keep the topside. Read more:
Looking ahead, risk appetite should remain well supported going into the European session, we may see the index claw back some ground as a bulls take a breather awaiting further cues to send currencies higher. A piece in the WSJ over-night suggesting further loosening of policy in the US is likely to be discussed at the next FOMC meeting will keep the topside. Read more:
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