US dollar is falling back today, heading lower as optimism makes an appearance. High beta currencies like the euro and the pound have the upper hand today as Forex traders look for a solution to the problems besetting the eurozone.
Eurozone leaders from Germany, France, Spain and Italy are meeting today to try to hash out a solution to the eurozone debt contagion. At the same time, Spain is likely to request bank aid. The news has been greeted with optimism, and Forex traders are looking for higher yields and moving out of safe haven mode.
US dollar is also still suffering from some of the after effects of the recent announcement from Ben Bernanke and the Federal Reserve. Operation Twist is being extended, and that means a weaker US dollar. Some see this as a prelude to another round of quantitative easing. QE3 would reduce the value of the greenback further, and that is something that many are taking into consideration right now as well.
Of course, the situation could change quickly. With the financial markets, and especially with the currency market, the latest news can completely change the course of the trading day.
At 14:02 GMT EUR/USD is up to 1.2578 from the open at 1.2541. EUR/GBP is up to 1.5607 from the open at 1.5592. USD/JPY is higher at 80.4190, up from the open at 80.2790.
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