US dollar is gaining ground today as a mixture of economic data and risk aversion send Forex traders toward the the greenback. Concerns about what will happen if Silvio Berlusconi in Italy, as well as a dramatic drop by gold, are also contributing to a stronger dollar.
With PPI on the rise in the United States, the greenback is finding some support, thanks to concerns about inflation. However, there is greater focus on the items contributing to risk aversion today. Construction data in the United States was disappointing, indicating that the US economy has a long way to go.
Additionally, there are concerns about what’s next for Europe. Former Italian PM Silvio Berlusconi appears to be making headway in the effort to replace resigning PM Mario Monti, and there is a great deal of speculation about what could be next for the eurozone. There are concerns that Berlusconi could crash the markets, and that sort of uncertainty is just the thing that sends Forex traders looking for safe haven.
Also, gold prices have dropped below $1,600. With gold weakening, it lends strength to the US dollar.
At 15:21 GMT EUR/USD is down to 1.3386 from the open at 1.3389. GBP/USD is down to 1.5299 from the open at 1.5428. USD/JPY is up to 93.6805 from the open at 93.5775.
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