Euro Drops Amidst China, Eurozone Emerging Market Problems

Euro is heading lower today as risk aversion makes an appearance. China’s stocks slid unexpectedly, and many are starting to look at the emerging markets in the eurozone as problem areas. With bond yields on the rise in the periphery, there are concerns of yet another eurozone crisis.

Risk in the markets in general took a hit today as Chinese stocks dropped dramatically. Shanghai saw some serious losses, and that is weighing on risk appetite all around the world, including on the currency market.
This is contributing to a somewhat lower euro, but there are also other issues at work, weighing on the 17-nation currency. One of the difficulties is that recent events and concerns about the economy put pressure on emerging markets. The emerging markets in the eurozone are struggling with the fact that their economies are still somewhat slow, but the euro is relatively strong.
Countries like Greece can’t meet their side of the bailout bargain, and that is causing some concern as well. With bond yields in the periphery on the rise again, there are worries that another eurozone crisis could be on the way.
At 12:45 GMT EUR/USD is down to 1.3088 from the open at 1.3092. EUR/GBP is down to 0.8502 from the open at 0.8515. EUR/JPY is down to 127.8795 from the open at 128.2195.

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