Even though the trade deficit unexpectedly widened in November, the US dollar is moving higher today. For the most part, US dollar is gaining as uncertainty prompts a certain degree of risk aversion. With rumors of an imminent French downgrade, a disappointing Italian debt auction, and worries about banks, it is little surprise that safe havens like the US dollar are in demand.
Indeed, there is a great deal of uncertainty right now. Italy’s debt auction was quite disappointing earlier today. Additionally, there are rumors that France is on the verge of a debt downgrade, and that could really upset markets. Even the signs of resilience in the eurozone economy can’t overcome the worries.
Also pressing down on investors and Forex traders is the disappointing earnings report from JPMorgan. The bank’s report wasn’t as good as expected, and there are worries that other financial sector companies will follow suit. And, of course, there is still concern over the banking industry in Europe. Banks are still turning to ECB loans, and there are concerns that balance sheets aren’t being shored up as they should be.
It’s clear that with all these other issues the rise in the US trade deficit just isn’t that important to Forex traders. They’re more interested in preserving what capital they have.
At 15:18 GMT EUR/USD is down to 1.2639 from the open at 1.2816. GBP/USD is lower at 1.5233, down from the open at 1.5331. USD/JPY is higher at 77.0035, up from the open at 76.7605.
If you have any questions, comments or opinions regarding the US Dollar,
feel free to post them using the commentary form below.
Be First to Comment