The Dollar tumbled against most of the major currencies during yesterday's trading session. The Dollar fell to a two-week low vs. the Euro, dropping almost 200 pips in one day. The Dollar weakened against the Pound as well.
Global stocks continued to rally today and in turn are pressuring the dollar. The advance in global markets is increasing risk appetite and as a result turns investors to look for riskier assets, such as the Euro and the Pound. It seems that investors are under the impression that the European markets will recover, and are trying to take advantage of the weak Euro.
In addition, several economic indicators were published yesterday from the U.S. economy. The most significant publication was the Long-Term Purchases report. The report showed that demand for U.S. assets has increased more than forecasted. The expectations were for a $77.3B increase, yet the end result showed that demand for U.S. assets has increased by $83.0B. The positive data has also contributed to the higher risk-appetite, and as a result weakened the Dollar further.
As for today, a batch of data is expected from the U.S. economy. The most important news publications look to be the Buildings Permits and the Producer Price Index (PPI), both expected at 12:30 GMT. Analysts have forecasted that the Building Permits have increased by 0.63M on May. If the end result will be similar, it might support the Dollar. However, this will have a muted impact on the market, if the PPI will reach expectations and drop by 0.5%. Such a result will show that the U.S. economy might be recovering in a slower pace than expected, and as a result the Dollar recover from yesterday's price move.