Euro Falls Back After Rally

Euro is falling back now, falling a rally that took place yesterday and in earlier trading. Euro surged higher, especially against the US dollar and the Japanese yen, earlier, but now things are changing. Concerns about risk are back on the table, and lower commodity prices are having their impact.

Euro got a boost earlier, thanks to US economic data that disappointed. High beta currencies surged on the news, and the greenback plummeted. That’s all changing now, thanks to the fact risk aversion is high, and there just isn’t much to support the euro.
Yes, US economic data was disappointing. But the eurozone data is worse, and policymakers worry that they are staring down a triple dip recession. Not only that, but commodities continue to do poorly. The euro is often supported when gold prices are, and gold has been struggling lately. The recent difficulties for oil are not helping.
Risk aversion is also high. Stocks are down around the world, and there are worries about continued unrest in the Middle East, and every now and then someone remembers Russia, which continues to worry Europe.
At 10:48 GMT EUR/USD is down to 1.2727 from the open at 1.2838. EUR/GBP is down to 0.7960 from the open at 0.8013. EUR/JPY is down to 134.5680 from the open at 135.9830.

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