Risk Appetite Driving U.S. Dollar Lower

Greater demand for higher risk assets ishelping to drive the U.S. Dollar lower into the mid-session. Today’s rally isbeing led by the British Pound and the commodity-linked currencies. Aturnaround early in the session has also underpinned the Euro.

Greater demand for higher risk assets ishelping to drive the U.S. Dollar lower into the mid-session. Today’s rally isbeing led by the British Pound and the commodity-linked currencies. Aturnaround early in the session has also underpinned the Euro.

Traders are driving up U.S. equitymarkets in anticipation of today’s quarterly earnings report from Intel. Equitymarkets opened higher this morning bolstered by good earnings news from Alcoaand CSX Corp.

The Euro mounted a strong turnaround afterit was reported that Moody’s downgraded the debt of Portugal. The initial reaction wasto the downside, but investors decided to ignore this news and focus on U.S. earningsinstead.

A report showing U.K. inflation had risen promptedthe start of a short-covering rally overnight. Traders now believe thatinflation could become the key issue which derails the recovery and are pricingin a possible rate hike by the Bank of England.