U.S. Dollar: Shrugging Off Bad Data

Disappointing economic data was largely ignored today, as the Dow rallied more than 80 points to make up for some of yesterday’s losses. Markets were able to advance mainly on several high profile earnings announcements from Target and Home Depot which topped market estimates. In addition better data from Europe managed to keep risk aversion constrained. As the resurgence of risk tolerance dictates, the greenback is being walked all over, suffering particularly large losses against the pound which advanced by more than 200 pips. USD/JPY holds on to small gains after a mid-day selloff wiped away earlier advances. Today’s rallies does show that markets are still resilient, but the optimism will quickly dry up if US data continues to disappoint.