Euro Slips on Uncertainty and Economic Worries

  May 03rd, 2012 at 14:47, Miranda Marquit

A fan of 500-euro billsEuro is slipping right now, following the latest data that promotes the idea that global economic uncertainty remains. Concerns about the eurozone economy are affecting the euro, but the 17-nation currency was showing resilience — until the latest economic news out of the United States. Earlier risk appetite due to cautious optimism is transforming in to risk aversion, and the euro is giving up its earlier gains against the US dollar.

Earlier, the euro made some gains against the US dollar on the expectation that risk appetite was returning because of economic recovery. Good news about jobless claims in the United States has been overshadowed by disappointing ISM data. On top of that, the eurozone’s own woes are in the spotlight again.

Even though the ECB kept rates steady at 1%, president Mario Draghi has already expressed the difficult road ahead for an economic recovery in the currency region. So, while the euro enjoyed a boost against the US dollar earlier, that is already gone as equities turn to losses and the euro gives up its gains. Without a clear plan for Europe, the euro is likely to continue to languish.

At 14:44 GMT EUR/USD has slipped to 1.3152 from an earlier high of 1.3182. EUR/USD opened at 1.3158. EUR/GBP is still a little higher, though, at 0.8128, up from the open at 0.8123. EUR/JPY is also still a little higher at 105.6555, up from the open at 105.4550.

If you have any questions, comments or opinions regarding the Euro, feel free to post them using the commentary form below.

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