US Dollar slides in Forex Trading as risk flows with stocks jumping

By CountingPips.com

The US Dollar has been on the defensive today in forex trading against the other major currencies as investor’s increased risk appetite has helped propel the currency lower and the stock markets higher. The dollar has been losing ground to the euro, British pound, Australian dollar, New Zealand dollar, Swiss franc and the 250150CalcDollarPaperCanadian dollar while edging up versus the Japanese yen at 2:34 pm EDT in the afternoon of the US trading session according currency data by Oanda.

The US stock markets, meanwhile, have had a positive session so far today with the Dow Jones gaining by over 130 points, the Nasdaq increasing over 40 points and the S&P 500 advancing by over 15 points at the time of writing.  Oil has traded almost unchanged around $66.16 while gold has also been mostly unchanged around the $990.900 per ounce level.

There has been limited economic news released with a short economic calendar scheduled for today.  US economic news releases today showed that the Chicago Fed National Activity Index fell in August.  Economic activity declined to a -0.90 score in August from a -0.56 reading in July according to the Federal Reserve Bank of Chicago.  The index three-month average improved from -1.61 in July to -1.09 in August.

Also released out of the US today was a report on Dallas manufacturing activity and the report showed that manufacturing was better than August but still contracting.  The Federal Reserve Bank of Dallas general activity index registered a -6.4 score in September from a -9.1 score in August. The report also showed that Texas-area production and employment improved in September from August.

Out of Europe earlier today, Germany’s consumer price index decreased by 0.4 percent in September after a gain of 0.2 percent in August.  Year-over-year German consumer prices have fallen by 0.3 percent in September.  An Italian consumer confidence index rose to its highest point since December 2006 according to data by the Research institute ISAE. The confidence index increased to a 113.6 score following a 111.8 score in August, surpassing economic forecasts.

USD/JPY Chart – The US Dollar gaining slightly today against the Japanese Yen after touching an eight month low point around the 88.22 exchange rate in overnight trading. The dollar last fell this low against the Yen in February 2009.

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