European Crisis Deepens, Stocks Suffer, Dollar Jumps

The US dollar gained against all 16 major currencies today as fear of the European debt crisis caused slump of stocks and drove investors to safe currencies.
The Standard & Poor’s 500 Index fell as much as 1.2 percent. The VIX, the index of market volatility, jumped 15 percent to 20, the highest level since March 23. Yields on securities of Ireland, Portugal, Greece, Spain, and Italy rose as bonds slumped.
The European troubles help the dollar, but what about the economy of the US itself, how it can affect the US currency? The economic data last week was depressing, this week is expected to be somewhat better. Analysts predict that the very important report about the US GDP will show that the US economic growth accelerated to 2.2 percent in the first three months of 2011.
EUR/USD dropped to 1.4023 from 1.4124 today as of 23:55 GMT. GBP/USD slid to 1.6085 from 1.6222, while USD/JPY went to 81.92 up from 81.77, following the slump to 81.31.

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