After losing ground to the euro earlier, the US dollar is back on top against its European counterparts. After re-thinking the Cyprus bailout, many Forex traders are less than enthusiastic. Greenback is in demand as safe haven is sought.
Forex traders and investors are trying to wrap their heads around what is likely to happen next on a number of levels. Earlier, the US dollar was lower against its European counterparts, particularly the euro, as traders and others celebrated the Cyprus bailout.
Now, though, things have changed. The implications of the last-ditch bailout deal are starting to cause worry amongst Forex traders and investors. The lack of a deal could have meant the exit of Cyprus from the eurozone. However, now there appears to be a precedent: Bailout at all costs.
With that in mind, the US dollar is gaining some traction. The US economy is in a better position right now than the eurozone economy or the British economy. That is lending the greenback some strength. On top of that, US dollar is also seen as a safe haven. In these uncertain times, that becomes attractive.
At 15:44 GMT EUR/USD is down to 1.2888 from the open at 1.2962. GBP/USD is down to 1.5187 from the open at 1.5231. USD/JPY is down to 94.4305 from the open at 94.5150.
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