US dollar is heading lower today, even with a few pro-dollar happenings earlier. With emerging markets crashing, and with tapering rumors continuing, the US dollar should be getting a little bit of a boost today. However, it’s not, because there is a little more uncertainty on the horizon than many Forex traders are comfortable with.
Earlier today, the emerging market currencies saw a huge crash, losing value against the greenback and other major currencies. On top of that, the rumors of possible Federal Reserve tapering as early as September continue to swirl. With the risk aversion in the markets recently, and with the possibility that quantitative easing comes to an end, the greenback should be higher against other major currencies.
However, it’s not. And that has a lot to do with the uncertainty in the US markets right now. First of all, even though there are dollar bulls that insist that tapering is imminent, the reality is that many are skeptical of the timing. The US economy just isn’t recovering at that great of a pace.
With all the uncertainty, some Forex traders are actually turning to the euro as the safety play, leaving the dollar in a lurch.
At 15:08 GMT EUR/USD is up to 1.3428 from the open at 1.3335. GBP/USD is up to 1.5679 from the open at 1.5648. USD/JPY is down to 97.1100 from the open at 97.5560.
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