The greenback is trading at a two-month low against the euro this morning (August 3rd), amid renewed optimism in the prospects for recovery.Ahead of data which is expected to show that manufacturing in the US hit its highest level in nearly a year in July, the dollar slumped against the euro as forex traders moved into higher yielding currencies, confident of stronger returns.Speaking to Bloomberg, Masashi Nakamura, a Tokyo-based economist at Mizuho Research Institute, a division of Japan's second-largest banking group, said: "Incoming US data will show an improvement, enhancing expectations that its economy will pick up. As risk appetite increases, the dollar and the yen will decline."The dollar also fell against sterling this morning, moving back towards a nadir of $1.6778 reached last week, an exchange rate not seen since October 21st.While the dollar has slumped, there has been an exodus towards the Aussie this morning, with Reuters data showing the high-yield currency trading at a ten-month high this morning.