US Dollar Gains as Risk Aversion Returns
Yesterday’s enthusiasm has largely disappeared and risk aversion is back in fashion on the Forex market. US dollar is gaining against high beta currencies today as attention turns back to the troubles in Europe.
US dollar is being sought as a safe haven today as Forex traders prefer the greenback to high yielding counterparts. The euro is, of course, lower due to bank troubles in the region. ECB is lending to banks in high amounts, and that is sparking concern of a banking crisis. Plus, the sovereign debt problems plaguing the region have yet to be resolved.
In the United States, things appear a little more stable. Economic data has showed improvement, and there are hopes that a recovery will accelerate soon. This makes the greenback more attractive as a stable currency — even without the fact that it is backed by what many consider the most stable taxpayer base in the world.
The only major currency gaining against the US dollar right now is the Japanese yen, which is higher as Forex traders look for the safest currencies. Yen continues to show strength in currency trading, and both these low beta currencies are preferred to their riskier counterparts in the current climate.
At 16:36 GMT EUR/USD is down to 1.2924, from the open at 1.3049. GBP/USD is also lower at 1.5627, down from the open at 1.5649. USD/JPY is down to 76.7110, down from the open at 76.7325.
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Earlier News About the US Dollar:
- Dollar Drops as Manufacturing Expands in USA & China (2012-01-03)
- US Dollar Lower Today, But Looks to Post Annual Gain (2011-12-30)
- US Dollar Index Rises on ECB Balance Sheet (2011-12-28)
- US Dollar Mostly Weaker (2011-12-27)
- 2012: Year of Weakness or Year of Strength for USD? (2011-12-25)