US dollar is gaining today, heading higher as concerns in the eurozone once again take center stage. The latest concern is the announcement by Moody’s that it will review European countries — and possibly make some downgrades.
The news means that uncertainty is a problem once again, and that forex traders are reluctant to take risk. In such situations, many turn to the US dollar as a safe haven. Even though the United States has its own problems, the greenback is still considered the most stable currency in the world, supported by the world’s most stable tax base.
With concerns over what’s next in the European saga causing uncertainty, it is little surprise that the US dollar is gaining. Also helping the greenback is a drop in commodities. Gold prices are plunging, and back below the $1,700 mark. Oil prices are also down, moving even further below the $100 a barrel level. Lower commodities usually means a higher dollar.
Without good news to prompt risk appetite, forex traders will turn to currencies like the US dollar and Japanese yen. Greenback is higher right now, gaining against most major currencies. As long as there is uncertainty, the US dollar is likely to retain the upper hand.
At 13:42 GMT, EUR/USD is lower at 1.3236, down from the open at 1.3379. GBP/USD is also lower, down to 1.5612, off from the open at 1.5654. USD/JPY is a little higher at 77.8960, up from the open at 77.6885.
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