US dollar is heading higher today, thanks to risk aversion in the markets. Disappointing economic news and continued worries about what’s next for the global economy continue to weigh on risk assets. Forex traders are looking for safe haven, and the US dollar is providing that.
Once again, concerns about what’s next for the US economy and the world economy are weighing on risk appetite. Risk aversion is on the rise, and traders are looking to the US dollar for stability at capital preservation.
The latest consumer sentiment survey from the University of Michigan is showing a decline for January, following a decline in December. Concerns about the fiscal cliff and the debt ceiling, and the political battles surrounding them, are affecting consumers. As consumer sentiment declines, there are expectations that the economy will struggle as consumers hoard cash instead of spend.
As a result of the news, the US dollar is higher on risk aversion. Even with China beating estimates for economic growth, there are still enough questions to weigh on risk appetite.
At 15:14 GMT the US dollar index is up to 80.013 from the open at 79.711. EUR/USD is down to 1.3307 from the open at 1.3377. GBP/USD is down to 1.5890 from the open at 1.5994. USD/CAD is up to 0.9942 from the open at 0.9858.
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