So often, news that can be interpreted as positive for the US has been bad for the dollar on the notion that risk aversion will ease and investment will start flowing around the world again after months of being squirreled away in US Treasuries.
That changed a bit yesterday when when investors suddenly became concerned that governments would would not be able to sell the bonds they need to fund their deficits after the UK hit a pothole when trying to sell 40 year gilt-edged bonds. Yesterday’s 5-year auction was only so-so, so the markets got a bot spooked. Today, the 7 year went better, so jitters are subsiding. As those jitters ease, the buck seems to be doing better this afternoon.
EUR/USD is edging lower in afternoon trade, now at1.3533. Dealers see a smattering of stops in the 1.3510/15 area and a heavier concentration below 1.3500. Firm support is down at 1.3415/30.