US dollar is lower today, heading down against European currencies as risk appetite returns and Forex traders look for better gains. US dollar is down especially against the euro as expectations rise concerning the upcoming ECB meeting.
There are expectations that the ECB could buy Spanish and Italian debt to keep yields lower, and prevent more problems. With the ECB pledging full support to the euro, and Germany pledging political support (while still wrangling over financial support details), the euro is getting a boost today. UK pound is also higher against the US dollar, thanks to general risk appetite.
US data is also playing its part today. Real GDP data for quarter two of 2012 was released, and it showed that growth slowed to 1.5 per cent from the revised 2.0 per cent growth seen in quarter one. The news comes ahead of next week’s FOMC meeting, and there is speculation that the slowing growth might be just what the Fed needs to trigger more stimulus.
More stimulus — especially an introduction of QE3 — would mean a weaker dollar. Provided, of course, that eurozone leaders really are able to do something to support the euro.
At 14:02 GMT EUR/USD is up to 1.2365 from the open at 1.2284. GBP/USD is higher at 1.5756, up from the open at 1.5687. USD/CHF is down to 0.9714 from the open at 0.9777.
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