US Dollar Looks to End May on a Strong Note

US dollar looks to end May with relative strength, thanks in large part to safe haven demand. Even though the euro is inching higher right now, on the month the US dollar is likely to log gains. Greenback is still higher against the yen and the pound, and the euro’s gains are by no means certain today.

Euro is managing to eke out small gains right now, overcoming earlier losses. However, the US dollar is still likely to end the month with overall gains. Concerns about the situation in Europe have remained high for months, and there isn’t a lot of expectation that things will suddenly improve. Worries about Spain are in the spotlight, and no one really knows for sure what will happen with the new Greek elections next month.
For now, US dollar is likely to remain in demand as a safe haven. It’s backed by US taxpayers — the most stable base in the world — and it offers a situation that most Forex traders are already familiar with. Euro may see some temporary gains, but until the sovereign debt crisis is sorted in Europe, the greenback is likely to remain higher overall.
At 13:10 GMT EUR/USD has inched higher to 1.2545, up from the open at 1.2541. USD/JPY is up to 79.4925 from the open at 79.4730. GBP/USD is down to 1.5673 from 1.5682.

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