Euro Struggles Continue Even as Risk Appetite Improves

Euro continues to struggle today on the Forex market, even though risk appetite is improving as a whole. Markets around the world are heading higher, including in Europe, and the US markets are set to open higher. However, even with that news, the euro is heading lower against most of its major counterparts.

Even as risk appetite improves, the euro is losing ground to its major counterparts. Part of the blame for the euro’s most recent losses can be laid at the feet of recent carry trades. A few weeks ago, the euro was lower because it was being used to fund carry trades with higher-yielding currencies. Then, as Forex traders unwound their carry trades the euro surged higher. Now that many of those trades are unwound, the euro is once again struggling.
Strong eurozone data provided a bit of a boost yesterday, but the euro is lower again today as markets continue to look for direction and as all eyes turn to the United States and the upcoming Fed decision. Expectations for the Fed to act — or at least indicate when it will act — are high, and that means more support for the dollar over the euro.
At 12:44 GMT EUR/USD is down to 1.1138 from the open at 1.1203. EUR/GBP is down to 0.7249 from the open at 0.7277. EUR/JPY is up to 134.6680 from the open at 134.2180.

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