US dollar is higher right now, gaining as risk aversion makes an appearance. With Italy on the verge of a
It’s true that the Greeks managed to form a unity government, and this government is likely to shepherd through the austerity measures that will lead to the available bailout funds for Greece. However, there is doubtful news to replace it.
Italy looks to be heading into trouble next, with Prime Minister Silvio Berlusconi might lose his own governing majority. Italy is having sovereign debt problems, and there are concerns that it might run into trouble. (Spain and Portugal are also countries of financial concern right now.)
Eurozone financial ministers are getting ready to meet on the EFSF rescue fund. There are concerns about how to adequately fund it. While some broad strokes were suggested a couple of weeks ago, few details have been offered regarding how the EFSF will work. As a result, there is concern about whether or not it will even be funded enough to contain the sovereign debt crisis.
With all this uncertainty about the eurozone, it is little surprise that the US dollar is higher. Forex traders are looking for some stability, and the euro isn’t offering it.
At 12:56 GMT EUR/USD is down to 1.3758 from the open at 1.3829. GBP/USD is lower at 1.6050, down from the open at 1.6069. USD/JPY is lower at 78.0510, down from 78.2050.
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