The US dollar fell against most of the major currencies during yesterday's trading session. The greenback dropped about 120 pips against the euro and about 150 pips vs. the British pound. The EUR/USD pair is now trading near the 1.3180 level.

The dollar fell yesterday after a better-than-expected result was published about the US Manufacturing Purchasing Managers' Index (PMI) report. The survey showed that manufacturing in the US expended to 55.5 in July, beating expectations for a reading of 54.2 points.

This has provided another signal that the US economy continues to recover and that global recovery may follow. As a result, investors turned to riskier assets such as the euro and the pound. For now it seems that positive data from the US is likely to depreciate the dollar, as it is interpreted as an indication for global recovery, and thus boosts risk appetite in the market.

As for today, a batch of data is expected from the US economy. The publication that looks to have the largest impact on the market is the Pending Home Sales figure. This report measures the change in the number of homes under contract to be sold that are awaiting the closing transaction. Analysts have forecast a 0.5% rise in July. If the end result will provide a positive figure, the greenback may weaken further. Traders are also advised to follow the Personal Spending and the Factory Orders publications.