Euro Drops as China Concerns Rise, But Recovers

Euro is dropping today, losing ground as risk aversion sets in on the latest evidence that China’s economy might be slowing. After seeing four days of gains against the US dollar, the 17-nation currency is fell behind, but is now moving higher again.

BHP Billiton shared information that steel production in China is slowing, and that has many worried about the state of industry in the up and coming economic superpower. This concern is added to what has been felt ever since China announced that its growth forecast for 2012 is 7.5 percent — instead of the 8 percent that its been for years.
Concerns about China and its economic growth are weighing on risk today, and that means a lower euro. Now that Forex traders are in a questioning mood, and now that there isn’t any good news to focus on, questions about the global economy and China are being asked. On top of that, this leaves openings for traders to take another look at the eurozone and consider whether or not the sovereign debt contagion can be properly contained. However, things seem to be turning, at least a little, for EUR/USD, and risk aversion abating a little.
At 14:14 GMT EUR/USD has overcome earlier losses and is at 1.3240, up from the open at 1.3237. EUR/GBP is a little higher at 0.8337, up from the open at 0.8331. EUR/JPY has gained to 110.4480, up from the open at 220.4000.

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