US dollar is looking at gains against high beta majors today, after seeing some weakness earlier. Some of the gains are being pared a little bit, but even with the expectation of good news in the eurozone, there are still doubts, and the US dollar is still being considered a safe haven.
Often, when stocks are doing well, the US dollar drops, as it is an indication that riskier assets are preferred. However, the greenback is doing well today, heading higher as high beta currencies pare their gains. The euro is struggling against the US dollar, and the pound is heading lower as concerns about the British economy weigh.
Even though there are hopes that the ECB will be forced to intervene in order to keep Spanish and Italian bond yields lower, the euro continues to struggle. There is no guarantee that a solution will be found, and even if the ECB does intervene, what’s to prevent the next crisis? And, in the United Kingdom, housing data continues to drag on the economy, and on the sterling.
For now, the US dollar is still in demand. There is enough uncertainty to keep the greenback the currency of choice.
At 13:59 GMT EUR/USD is down to 1.2392 from the open at 1.2397. GBP/USD is down to 1.5574 from the open at 1.5614. USD/JPY is down to 78.3300 from the open at 78.6030.
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