Uncertainty is growing in global markets, and that is prompting risk aversion. The US dollar is higher in response, sought as a safe haven. Greenback is higher on prospects for slowdown on a global scale, and Greece remains a point of difficulty as speculation remains regarding Greece’s bond swap. For now, all of this means Forex traders are interested in the stability that comes with the US dollar.
Greenback is on the rise today with concerns about the global economy taking center stage. Key Libor data is flat for the US dollar, with the cost of borrowing dollars on the London interbank market remaining the same. However, rates for the euro and the sterling fell. This isn’t having a huge effect on markets right now, though, since Forex traders are more concerned about what’s next for the global economy.
Predictions of economic slowdown are coming in. With China reducing its growth forecast from 8 percent to 7.5 percent, there is a lot of uncertainty. On top of that, the Greek debt swap expected to take place earlier this week is also fueling uncertainty, since no one is sure it will go smoothly. In times of uncertainty, investors and Forex traders want stability, and that is what the US dollar offers.
At 14:27 GMT EUR/USD is lower at 1.3122, down from the open at 1.3217. GBP/USD is down to 1.5765 from the open at 1.5865.
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