Dollar depreciates against the euro because of optimism in the German business community

The dollar depreciated against the euro because data on the optimistic sentiment in German business circles had benefited the EU currency. Meanwhile, investors paid attention to riskier currencies. Because of this, interest in the dollar as a safe option has changed.

The Ifo institute informs that the German business groups in December became more optimistic than expected. This happened due to improvements in the country's economy despite the growing inflation and energy crisis. 

According to the vice president of dealing and trading at Monex USA John Doyle, the stability of the dollar decreased due to high risks in trading.

The cost of the American national currency was increasing during most of the year because of the Fed's tight monetary policy. Also, geopolitical tensions influenced the growth of the dollar. But recently, the dollar faced the pressure, as investors set their hopes on the Fed’s limited opportunities in the interest rate situation.