US dollar is edging higher today, gaining as uncertainty creeps into the picture. Many Forex traders are selling the euro and taking a wait and see approach as the week features a decision on the European Stability Mechanism from Germany’s high court, and a meeting of the Federal Reserve’s Federal Open Market Committee.
There is a great deal of uncertainty right now over what will be next for the eurozone. Germany’s Bundesgerichtshof will be determining whether the expansion of the ESM is actually in line with the German constitution. Without Germany’s support, some worry about the future of the euro.
Additionally, there is speculation about Ben Bernanke will announce at the conclusion of the two-day FOMC meeting. Will he announce more stimulus? Or is the economic situation in the United States still good enough to warrant holding off for a little bit longer? Thanks to some of this uncertainty, and perhaps a little profit taking on the recently strong euro, it is little surprise that the greenback has the upper hand — at least for now.
At 19:03 GMT the US dollar index is higher at 80.367, up from the open at 80.188. EUR/USD is down to 1.2779 from the open at 1.2807. GBP/USD is down to 1.6003 from the open at 1.6016. USD/JPY is down to 78.2600 from the open at 78.2465.
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