US Dollar Mostly Lower on Optimism over Europe

US dollar is mostly lower right now, due to optimism over Europe. Markets are reacting favorably to the latest news about a tighter fiscal union meant to stave off further euro crises. US dollar isn’t needed as a safe haven right now, so it is lower.

The enthusiasm about a new situation in Europe comes even though Britain has rejected the new treaty. Britain’s objections are to sanctions on countries that exceed certain deficits (presumably because Britain exceeds the current limit), as well as the requirement that signatory nations must submit their budgets to the European Union for review — and possible adjustment.
Even with Britain refusing to join in, though, there is risk appetite in the markets. All of the European Union countries, other than Britain, have approved the new rules. As a result, the US dollar is down against the euro on the new optimism. US dollar is even down against the UK pound right now. Forex traders seem ready to take a bit of a chance today, and enjoy higher yields.
However, things could quickly change; that has been the rule lately. As a result, the US dollar stands ready as a safe haven going forward.
At 16:50 GMT, EUR/USD is up at 1.3374, up from the open at 1.3341. GBP/USD is up to 1.5650 from the open at 1.5629. USD/JPY is lower at 77.5800, down from the open at 77.6375.

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