Markets over the past 24 hours have taken a significantly more positive attitude towards risk as equity markets have pushed higher with relief over earnings data and cautious optimism over the economy. Although the optimistic tone could be maintained in the very short term, the net global risks suggest that any further improvement in confidence will not be sustainable. EUR/USD and AUD/USD look to offer solid selling opportunities at 1.4170 and 0.8080 respectively.

The dollar was unable to make any headway in European trading on Wednesday and the Euro pushed higher during the day as an improvement in risk appetite curbed US currency demand and it dipped to a one-month low on a trade-weighted basis.

The growth-orientated data offered some degree of support with the New York Empire manufacturing index strengthening to -0.6 in July from -9.4 previously, the strongest reading since October. The decline in industrial output also slowed to 0.4% in June from a revised 1.2% previously.

The combination of data releases and stronger than expected corporate earnings helped underpin risk appetite and the Euro pushed to highs above 1.41 against the dollar.

Reports that lender CIT group was close to filing for bankruptcy after failing to secure Federal aid tempered the mood of optimism. The dollar edged stronger on Thursday before weakening again following the JP Morgan results.