The U.S. Dollar is under pressure against most majors as investor concern that the U.S. economy’s recovery is losing steam drove traders into higher yielding assets. The overnight weakness in the Dollar was triggered by a better than expected economic report in Australia and a strong surge in Asian equities.
The Dollar has been under pressure lately because of a string of weak economic data while the Euro Zone economy has been showing signs of strength, driving investors into riskier assets. Another concern at this time is how long the weaker U.S. economy will continue to drive investors into the higher yielding currencies. At some point, global investors will turn their focus once again to the Dollar because of risk aversion worries.
The AUD USD rose to its strongest level in three months on signs that Asian economic growth continues to remain strong despite predictions of a slow down in China. Australian traders turned bullish after the manufacturing index in Australia rose 1.5 points to 54.4. Speculative traders are also looking for tomorrow’s Australian retail sales and building approvals to show advances for June.