Forex Flash: Risk appetite permeates markets in dollar sell off – Investec

FXstreet.com (Barcelona) - Risk appetite looks set to continue Friday as the European session looks to build on positive Asian gains. According to the Investec Research Team, “The overall positive tone has been underpinned by a wide dollar sell off”, as seen with the GBP/USD climbing back towards the mid 1.5300’s.

The general tone can clearly be seen by the climb in the AUD/JPY over the last few sessions, with the market favoring the higher yielding asset linked Aussie dollar over the safe haven yen. A look back at yesterday’s fundamentals also makes for interesting reading. Despite Thursday’s below par retail sales reading, sterling has held its ground against both USD and EUR, with the euro making gains on the dollar after the Bundestag approved the Cypriot bailout.

A clear majority voted in favor of the Cypriot package with German Finance Minister Schauble assuring fellow politicians that approving the aid would prevent the crisis from spreading to other countries. The proof in the pudding is in the eating as they say but Schauble’s statement sounds all too familiar, do we soon forget recent events in Greece and Ireland?