US Dollar Higher on Risk Aversion
US dollar is getting a boost today as risk appetite fades. After ending last week lower, the US dollar is gaining today as risk aversion makes an appearance, thanks to the results of the G-20 meeting over the weekend. With delegates telling the eurozone to get its act together before approval for more IMF funds will be made, US dollar is higher as Forex traders look for stability.
Over the weekend, G-20 delegates complained about the slow process of getting anything done in Europe. From the response to the Greek debt crisis, to the building of a “firewall” designed to keep the contagion from spreading, European leaders have wrangled over everything. The whole process has been slow, and the G-20 essentially told the eurozone to get its house in order if it wants more contributions to the IMF.
Some of the risk aversion has been fading, though. The latest pending homes sales data out of the United States shows improvement in January, rising 2 percent. This improvement puts contracts near a two-year high for January. With the good news, high beta currencies like the euro and the pound have pared their earlier losses against the US dollar, although they are still lower on the day so far.
At 15:53 GMT EUR/USD is down to 1.3407 from the open at 1.3465. GBP/USD is down to 1.5858 from the open at 1.5887. USD/JPY is lower at 80.4500, down from the open at 81.2725.
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