Forex Traders More Cautious Today

Forex traders are showing a little more caution today, after yesterday’s enthusiastic shift toward risk appetite. Euro is moving a little lower against major counterparts now that traders are re-thinking the eurozone attempt to rein in sovereign debt.

One of the issues for the euro today is that Italy’s debt rose in cost. As a result, Forex traders and others are once again looking at yesterday’s announcement from eurozone leaders, and wondering if it really be a long-termsolutionfor the entire currency region. Some think that it may not be enough, and may not be a long-termsolution.

Yesterday’s euphoria sent the euro to its biggest single-day gain in more than a year. While the plan calls for private bondholders to take a significant haircut, and while recapitalization is planned for, problems with growth in the eurozone, as well as questions of where banks will get their funding, are starting to draw interest. And the current plan just doesn’t do much to address these concerns. It appears that we will like reach another crisis point fairly soon, and another emergency summit will need to be called. But will any of it really solve the underlying issues facing the euro?

At 15:29 GMT EUR/USD is down to 1.4168 from the open at 1.4189. EUR/GBP is down to 0.8780 from the open at 0.8816, and EUR/JPY is down to 107.35 from the open at 107.77.

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