Forex Market Update: U.S. Dollar Remains Under Pressure as Risk Appetite Returns

A broad rise across European equity markets boosted risk appetite and weighed heavily on the dollar. EUR/USD traded up to 1.4144 and Cable hit 1.6442 highs before profit taking activity set in. There was speculation of real money demand for dollars, with some linking today’s USD 19 billion 10-year note auction as a potential source of interest. This tempered the dollar sell-off, although momentum remains on the downside as equity markets drive sentiment. The commodity bloc currencies performed well as a result and AUD/USD moved up to 0.8131 before consolidation set up and USD/CAD moved up to 1.1063 before CAD/JPY buying interest forced a move back in to 1.1000 ahead of the North American open.