US dollar is once again gaining the upper hand, rising against high beta currencies as uncertainty drives Forex traders to safe havens. This time, it’s reduced optimism about a quick solution to the sovereign debt problem in the eurozone.
Over the weekend, rumors flew about a solution to the sovereign debt situation: Greek debt was to be restructured! The EFSF is to be expanded! Banks are to be recapitalized!
While some of those things might actually happen, and while they could save the eurozone, the idea that a solution will be worked out by October 23, as many hope, is slowly fading. German leaders have stated that a quick solution will not be seen — the problem is too complex.
As a result, the US dollar is on the rise again in Forex trading. Greenback is gaining as worries about what could be next take hold, and concerned that this week’s European Union summit will have little effect, and provide no solutions to the problem. With all of this uncertainty, and dashed expectation, it is little surprise that the US dollar is on the rise, gaining against high beta currencies as Forex traders flee toward safety.
At 13:48 GMT, EUR/USD is down to 1.3786, lower than the open at 1.3868. GBP/USD is also down, heading to 1.5785 from 1.5833. USD/CAD is higher, rising significantly against the loonie, to 1.0141 from the open at 1.0113.
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