US Dollar Down on Risk Appetite

The US dollar continues to move up and down with the risk flavor of the day, as today it was a move by traders to being more risk oriented, and consequently the greenback fell in value as a result against other major currencies.

Currencies linked to commodities peformed against against the US dollar, while the British Pound weakened against the dollar.

While the UK isn't focused on as much in relationship to the European Union because they still have their own currency, it is in danger of losing its AAA debt rating according to Fitch Ratings, as their slow response in implementing austerity measures is causing investors to lose confidence in the Pound.

The Canadian, Australian and New Zealand dollars did well today because of their link to commodities, after taking a beating lately because of risk concerns related to raw materials.

US Dollar Lowest Against Yen in 13 years

Although the U.S. dollar has been the beneficiary of the forced liquidation of commodity positions which are for the most part denominated in U.S. dollars, it hasn't been because underlying fundamentals have changed, as its drop against the yen has proven. Today the dollar fell to a 13-year low against the yen, dropping to 90.89.

It has rebounded some since then, but it does show that the yen is behaving like the fundamentals connected to it, while the dollar isn't because of the forced liquidation mentioned above.

Still, the remarkable factors in the market keep the dollar high against other nations' currencies, as it was up to two-year highs against the euro, while it enjoyed a six-year high against sterling.

Sterling fell to as low as $1.5270 against the U.S. dollar, while the euro was as low as $1.2498. The Australian and New Zealand dollars also plunged against the greenback, with the Australian dollar taking the biggest hit, falling by 7.6 percent to $0.6213, while the New Zealand dollar was right behind it, decreasing by 6.5 percent to $0.5576.