Euro Struggles as Risk-Off Returns to Currency Market

Euro is losing ground today against its major counterparts as risk-off dominates the sentiment on the currency market. The fiscal cliff issue in the United States is causing uncertainty in a number of markets, and there are still concerns about what’s coming for the eurozone in 2013.

Euro is was lower earlier today as US lawmakers once again prepare meet to wrangle and try to come to an agreement that will help avoid the so-called fiscal cliff — a combination of tax increases and spending cuts that could result in recession. That uncertainty is having a big impact on the currency market, and resulting in a risk-off situation today, even though the euro is making some headway now.
Also weighing on the euro are expectations for 2013. Concerns about eurozone recession are present, and there are worries that the sovereign debt crisis could still cause problems, even though some eurozone leaders insist that the worst is over. There are still recession concerns, and the situations in a number of the embattled countries still aren’t completely resolved.
At 13:56 GMT EUR/USD is down slightly higher, at 1.3220, up from the open at 1.3214. EUR/GBP is lower, down to 0.8162 from the open at 0.8170. EUR/JPY is up to 114.1945 from the open at 113.3985.

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