Forex traders and investors are seeking alpha right now, and that means that the US dollar is headed lower. With risk appetite making an appearance, high beta currencies are preferred to the greenback right now.
There is an interesting state of affairs right now, with emerging markets getting a boost. As China shows signs of accelerating its own market success along with other emerging markets, the US dollar is heading lower. Forex traders are interested in higher yields, and the greenback doesn’t offer those.
In the background, of course, is the fiscal cliff. Concerns about what’s next in the negotiations are on the rise as it appears that US politicians have stalemated in talks about the fiscal cliff, and what should be done to avoid it. While those talks aren’t having a huge impact yet, they could come sharply into focus as the month progresses and we approach the end of the year.
For now, the US dollar index is dropping, with the greenback down against its major counterparts.
At 13:56 GMT the US dollar index is down to 79.687 from the open at 79.909. EUR/USD is up to 1.3100 from the open at 1.3053. GBP/USD is up to 1.6126 from the open at 1.6091. USD/JPY is down to 81.8440 from the open at 82.2450.
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