The US dollar fell vs. most major currencies on optimism of a global economic recovery as over 75% of S&P 500 companies that have reported earnings have beat analyst expectations. This data has helped increase risk appetite and taking equities higher. The University of Michigan consumer sentiment index fell to 66 in July from a revised 70.8 from the previous month, in line with expectations.
The euro rose to a near seven-week high against the dollar after positive economic data helped increase investor risk appetite. The Markit Economics report showed that a composite index of the manufacturing and service industries in the 16-nation Eurozone rose to 46.8 in July from 44.6. Also helping the euro was positive data from Germany, Europe’s largest economy. The Ifo institute in Munich said that German business confidence increased to 87.3 in July, beating forecasts of a increase to 86.5. A gauge of current business conditions rose to 84.3 from 82.4, and a measure of expectations rose to 90.4 from 89.5.
The British pound fell against the dollar after a report that showed the UK economy shrank more than expected. Domestic gross domestic product fell 0.8% in the second quarter, compared to forecasts of a 0.3% fall. The economy shrank 5.6% from the previous year. Also hurting the sterling is an index of services which fell 1.0% in May.
The Japanese yen was weaker as an increase in risk appetite encouraged investors to exit the safe-haven currency.
The Canadian dollar appreciated against the dollar for the sixth consecutive day as investor sentiment continues to improve among stronger equities. Crude oil prices staying above $67 a barrel has also helped the commodity-linked currency.
The Australian and New Zealand dollars both strengthened against the dollar as a rise in Asian equities helped increase investor demand for higher-yielding assets. The MSCI Asia Pacific Index rose for a ninth day, its longest winning streak since 2004.
