Dollar momentum grows as risk retreats further

EUR/USD is now trading down by 0.4% to near 0.9900 and that is even before we get to the PMI data in Europe later today. This comes as the dollar is seen pulling higher with GBP/USD also down 0.4% to 1.1720 and AUD/USD down 0.3% to 0.6857 on the day. The extension comes as equities are slipping further with S&P 500 futures down 20 points, or 0.5%, currently. The other key tailwind for the dollar (and bad for risk trades) is the fact that the Chinese yuan is deteriorating rather sharply after having seen USD/CNY break above 6.80 since the end of last week: With the pair targeting a push towards 7.00 next, that leaves some added scope for the dollar to gain further while risk trades may not see too much comfort if the pace of the decline in the yuan stays as it is. This article was written by Justin Low at www.forexlive.com.
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