US dollar is mixed today, due in large part to the latest uncertainty coming from the eurozone. Earlier, risk appetite was all the rage, with the euro reaching new highs for the month of March, and a number of currencies gaining against the greenback. Now, though, the dollar index is higher, and the euro has faded against the greenback. In large part, this is due to the suggestion from the OECD that the eurozone’s firewall is insufficient for the debt crisis.
US dollar is higher against the euro now, with the euro giving back all of the earlier gains from an Italian bond sale. The news that the OECD believes that the eurozone needs a 1 trillion euro firewall, instead of the current 700 billion euros, is raising the spectre of debt crisis contagion.
On top of that, a blow to general risk appetite has fallen in terms of US economic data. Yesterday, Ben Bernanke pointed out that the labor market isn’t recovering as well as many would like. Additionally, today’s release of Case-Shiller home prices for January showed that they fell again in the United States — to a nine-year low. The news isn’t good for risk appetite, and with the concerns about the eurozone, it is small surprise the dollar is gaining ground.
At 14:25 GMT EUR/USD is down to 1.3327 from the open at 1.3359. GBP/USD is a little higher at 1.5975, up from the open at 1.5971 but down from a session high of 1.6003.
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