The US dollar erased its earlier losses versus the euro today as the fundamental data from the United States was not very encouraging. The greenback was weaker against other most-traded currencies as Japan’s quantitative easing sparked hope for global economic growth.
The Richmond Manufacturing Index slumped from 5 in December to -12 in January, while analysts have promised the index would stay little changed. Last week, the preliminary report showed that the University of Michigan consumer sentiment unexpectedly dropped to 71.3 this month from 72.9 in the month before. All in all, the data from the USA was surprisingly bad, discouraging traders from risk.
The monetary policy decision of Japan’s central bank overshadowed the data from America though and returned risk appetite to the Forex market. Therefore, it is surprising that the euro remained weak even as the German ZEW Economic Sentiment climbed from 6.9 to 31.5 in January, beating the forecast of 12.2 and reaching the highest level since May 2010.
EUR/USD traded near its opening level of 1.3312 as of 18:24 GMT today. Meanwhile, GBP/USD advanced from 1.5826 to 1.5861 and USD/JPY retreated from 89.58 to 88.68.
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