US dollar is heading higher today, gaining as risk aversion rises, and concerns about the future of the eurozone dominate world markets. Greenback is getting a boost as a safe haven as Forex traders shun high beta currencies.
Risk aversion has taken complete control of world markets today. Forex traders are turning to safe havens like the US dollar as the VIX shows an increase in volatility, and as concerns about Europe take center stage. The name of the game is stability right now, in a world where no one is sure what will happen next with the eurozone.
Concerns about Spain and Greece are on the rise again. Will Greece receive more bailout funds? Or will its efforts be deemed insufficient? And will Spain ask for a huge bailout package to help its ailing regions? Eurozone debt rises, and there appears to be no end in sight to the crisis.
In the meantime, global equity markets are plunging. Following Asian and European markets, US markets have opened lower. Indeed, the Dow is down more than 200 points in early trading. With so much upheaval and worry, it is no surprise that Forex traders are turning to the US dollar — considered the world’s most stable currency.
At 13:53 GMT EUR/USD is down to 1.2076 from the open at 1.2118. GBP/USD is down to 1.5492 from the open at 1.5625. USD/JPY is down to 78.2315 from the open at 78.4500.
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