US dollar is heading higher today as risk aversion returns to the markets and investors and Forex traders look for safe haven assets. Global economic uncertainty has many wondering what will happen next, and even the threat of QE3 in the United States isn’t keeping the dollar down today.
Greenback is lower today, thanks to risk aversion. Forex traders are looking for capital preservation more than yield, and that means the US dollar is the currency of choice — along with the Japanese yen. The latest news out of Europe is disappointing, and global economic growth continues to slow.
In Europe, Italy and Germany reported worse than expected economic data. China recently cut its interest rate because of worries about slowing economic growth. Since China might not be ready to help the global economy out of its doldrums yet, investors are trying for safety.
Another concern is quantitative easing. While QE3 would weaken the US dollar somewhat, right now Forex traders are more interested in capital preservation, and it’s not certain that Ben Bernanke and the Federal Reserve are quite ready to pull the trigger.
At 15:38 GMT EUR/USD is down to 1.2491 from the open at 1.2560. GBP/USD is down to 1.5433 from the open at 1.5527. USD/JPY is lower at 79.5185, down from the open at 79.6300.
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