US dollar is dropping today, thanks to the fact that economic news is showing some improvement. Greenback had inched higher a little earlier, but now risk appetite is making an appearance and the dollar is lower.
Even though manufacturing grew at a slower pace in October, the ISM is still at 51.5, which indicates expansion. That is good news, even though it could be better. Unemployment claims are down for last week, dropping to 363,000. US productivity has also risen by 1.9 per cent.
These improvements are somewhat small, but they are prompting a little bit of a return to risk appetite, sending the US dollar lower. Of course, some Forex traders are just enjoying the news right now. There will be a reckoning over the next few weeks as the damage from Hurricane Sandy is toted up.
For now, though, there is risk appetite in the markets and the US dollar is lower as a result. Greenback is down against other major currencies, excepting the Japanese yen, as Forex traders look for yield.
At 12:56 GMT the US dollar index is slightly lower, down to 79.905 from the open at 79.933. EUR/USD is up to 1.2975 from the open at 1.2957. GBP/USD is up to 1.6151 from the open at 1.6130. USD/JPY is higher at 80.0500, up from the open at 79.8070.
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