The US dollar is set to end the week lower, in spite of showing strength earlier. Forex traders and investors waiting to see what the final outcome of the situation in Cyprus is, along with what happens in other areas of the world. So far, the news has led to cautious optimism, and the greenback hasn’t been needed as a safe haven.
Earlier in the week, the US dollar gained strength as concerns about Cyprus and the eurozone recession weakened the euro. Additionally, worries about the possibility of more quantitative easing from the Bank of England weighed on the pound. However, as the week progressed, better news appeared.
The ECB expressed flexibility in dealing with Cyprus, and the precedent is clear: The ECB wants to support the euro. Additionally, slightly better news appeared in terms of UK data, and minutes from the last BOE meeting showed that Mervyn King was voted down in his attempt to add more stimulus.
Now, the dollar index is lower, and the greenback is losing ground to its major counterparts.
At 14:42 GMT the dollar index is down to 82.433 from the open at 82.784. EUR/USD is up to 1.2949 from the open at 1.2895. GBP/USD is up to 1.5186 from the open at 1.5172. USD/JPY is down to 94.9205 from the open at 95.0400.
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