US Dollar Gains as Greece Jitters Re-Emerge

Earlier this week, many figured that the situation in Greece was pretty much sorted. However, it appears that this isn’t the case. With concerns rising about Greece yet again, the US dollar is gaining as risk aversion rises and Forex traders look for safe haven.

More stipulations for Greece to meet in order to receive ECB bailout funds have been added, and Greek leaders are once again balking. Or it could be that Greek PM Lucas Papademos isn’t sure the Greek parliament will vote to accept all of the stipulations. At any rate, a Greek debt deal is once again in doubt, and the US dollar is gaining because of it.
US dollar could also see some recovery against the euro in the coming week based on other economic factors. A default by Greece is unlikely to lock up the credit markets (although if other defaults follow there could be problems), but eurozone growth isn’t as attractive as it could be.
Meanwhile, the economic news out of the United States is starting to look better. Economic recovery is still slow, but progress appears to be coming. With instability threatening the eurozone, the stability of the US dollar is looking more attractive right now.
At 15:13 GMT EUR/USD is down to 1.3177 from the open at 1.3285. GBP/USD is also lower at 1.5752, down from the open at 1.5817.

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