US dollar is heading higher as uncertainty in the financial markets creates a demand for safe haven currencies. Greenback is heading higher against the euro and the UK pound. While the pound has been struggling most of today anyway, this development is new to the euro, a currency that had been seeing some strength earlier.
Right now, the US dollar is gaining favor as stocks retreat and uncertainty rises. Concerns about the eurozone are leading the list of worries resulting in risk aversion. Indeed, worries about Spain and Italy are cropping up again, especially in light of economic data that indicates that the eurozone might be headed for recession.
Even though the US economic data isn’t terribly impressive recently (March payrolls came in lower than expected), there is still the idea that the greenback is the most stale currency in the world, backed by the world’s most stable taxpayer base. Right now, as uncertainty sets in and Forex traders and investors wonder what’s next, the US dollar seems like a good bet as a safe haven.
At 15:43 GMT, EUR/USD has turned lower. While the pair opened above the 1.3100 level, at 1.3106, and saw a session high of 1.3146, the current quote is 1.3079. GBP/USD is also lower, falling to 1.5836 from the open at 1.5893. USD/JPY is lower, though, down to 80.9480 from the open at 81.5100.
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