The US dollar strengthened vs. most major currencies on speculation that demand for higher-yielding assets may fall. The dollar will look to continue to be a gauge on investor risk appetite as the appetite for risk moves opposite the dollar.
The euro weakened against the dollar as some economic data came in lower than expected. The ZEW Center for European Economic Research said that Eurozone expectations of economic growth had a reading of 51.8, lower than forecast at 58.0. In Germany, Europe's largest economy, economic confidence came in at 51.1, lower than the previous reading of 56.0.
Sterling fell against the dollar after Fitch Ratings said the UK's sovereign credit rating is the most at risk among top-rated nations. David Riley, Fitch's head of global sovereign ratings, said that the country needs the largest budget adjustment among countries it rates AAA. Standard and Poor's currently has a negative outlook on the country. The Office for National Statistics reported the biggest budget deficit for any September since records began in 1993. The deficit grew to 14.8 billion pounds from a deficit of 8.7 billion pounds a year earlier. House prices fell 4.1%, beating forecasts of a 4.9% fall.
The Japanese yen rose slightly against the dollar as investor risk appetite fell.
The Canadian dollar traded higher against the dollar as crude oil rose above $80 a barrel earlier in the session.
The Australian and New Zealand dollars declined against the greenback as investors took profit from yesterday's strong gains. Business confidence in Australia rose to 16 in October, near its highest level in six years. With economic conditions continuing to improve, the Reserve Bank of Australia is expected to raise interest rates from 3.5%. Benchmark interest rates in New Zealand are currently 2.5%, making both currencies attractive against the dollar and yen whose countries have interest rates of 0-0.25% and 0.1% respectively.
10-Year Treasury Note Yield: 3.4592%
Dow Jones Industrial Average: 10,232.99 +6.12