US dollar is in demand as a safe haven as concerns about the eurozone continue to grow. Even though the US has its own economic struggles, the dollar is considered one of the most stable currencies in the world, and Forex traders are looking for that safety.
It doesn’t hurt, too, that, once again, there are whispers that the sovereign debt crisis could mean the end of the eurozone. Many Forex traders are concerned about what could happen next, as bond yields in Europe continue to rise, and as economic activity in the eurozone slows.
US dollar index is higher as the greenback appreciates against every major currency except the Japanese yen. It’s no surprise that the yen is rising as well. (No amount of intervention is likely to keep the yen down as long as risk aversion is at this high level.)
For now, it appears that the eurozone will dominate the financial markets, including the Forex market. And, as long as the troubles remain in the eurozone, the US dollar is likely to continue to show strength as investors and traders look for a way to reduce their exposure to euro assets.
At 14:39 GMT, EUR/USD is lower at 1.3569, down from the open at 1.3635. GBP/USD is also down, heading to 1.5856 from the open at 1.5911. USD/CAD is rising to 1.0223 from the open at 1.0169, and USD/JPY is lower at 76.9449, down from the open at 77.1000.
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