The euro is dropping today — a rapid drop against the US dollar. Euro is losing ground on concerns about what’s next for the eurozone, but there are also concerns about how China’s slowing growth, as well as the lack of growth in reserves, are affecting the 17-nation currency.
Better economic for the eurozone isn’t helping much today. Indeed, analysts expected a 3.2% decline in May industrial data for the eurozone; instead, the decline was 2.8%. This better than expected news isn’t outweighing other concerns, though. Forex traders are are focusing on some of the other realities associated with the markets right now.
Worries about how the eurozone periphery will get through the current debt crisis, as well as finding long-term solutions to prevent this happening in the future, are high on the list of items holding the euro down. Also not helping is the latest news out of China. China doesn’t appear to be growing its reserves, and it seems that a lot of the support the euro has garnered recently has been the result of China adding more euros as it diversifies away from dollars. However, with reserves in China no longer growing, the euro is losing one area of support. Risk aversion isn’t helping the situation, either.
At 14:24 GMT EUR/USD is down to 1.2180 from the open at 1.2238. EUR/JPY is down to 96.5250 from the open at 97.6350. EUR/GBP is actually rising, though, moving up to 0.7900 from the open at 0.7894.
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