Dollar Appeal Declines on Riskier Assets Outlook

The dollar continued to lose ground this Wednesday as appetite for risk remains predominant in trading markets worldwide this week, making investors to bet higher-yielding assets once and moving the dollar towards a weekly loss versus multiple currencies.

Several events during this week determined a reversal on the U.S. dollar charts as optimism increased significantly after positive reports were released in different economic regions around the globe, impacting negatively the demand for safer assets, and the dollar is an option among these. A Chinese manufacturing report this Thursday is likely to spur demand for riskier assets even further towards the end of the week, as the Asian’s nation economic recovery can be also interpreted as a growth on demand for its products globally, a highly positive evidence for traders to opt for higher-yielding assets.

The dollar had been gaining for a number of consecutive weeks, as Europe, mostly, brought risk aversion to high levels since the beginning of 2010. As the situation improves in Europe, as positive reports continue to flow in Asia and North America, traders regained their confidence, abandoning safer assets in the U.S.

EUR/USD traded at 1.3508 as of 04:18 GMT from a previous intraday rate of 1.3399.

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