US Dollar Mostly Higher, Even on Deficit Panel Failure

A bi-partisan committee designed to find a solution to the debt crisis in the US has failed. As a result, US stocks are in free fall today. The US dollar, though, is mostly higher in Forex trading.

US dollar is gaining in Forex trading as concerns about world events catch up with investors and traders. Risk aversion is a major part of financial market proceedings today, and that means that Forex traders are looking for stability. Even with the budget woes in the US, the dollar is considered the most stable currency in the world.

Plus, what other currency is going to be considered a better choice? It’s true that the yuan is supposed to move toward more flexibility, but it will be years before the yuan is in a position to to take over as the de facto global currency. The eurozone is in such a mess that euro can’t be relied on right now. Even the yen is down against the US dollar today.

For now, the US dollar is gaining, even on the uncertain economic and budgetary future for the US. Things could change, but, for now, with all of the economic concerns and uncertainty, safe haven status is likely to help the greenback.

At 16:26 GMT EUR/USD is lower at 1.3509, down slightly from the open at 1.3515. GBP/USD is lower, dropping to 1.5651 from the open at 1.5793. USD/JOY is higher at 76.9640, up from the open at 76.8820.

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