Euro is heading lower today, dropping as risk aversion sets in, and as the dollar dominates the markets. Uncertainty over the eurozone, combined with the expectation that the Fed will end quantitative easing relatively soon, is sending the 17-nation currency lower against the greenback today.
Eurozone leaders are recommitting themselves to fixing the economy and moving forward with bailout programs for Greece and Cyprus. Even though there have been concerns about what’s next for the eurozone with the recent plunging of global markets, leaders are re-affirming that they are moving forward with bailouts and plans for a tighter banking union, as well as making rules for bank bailouts.
However, even with this optimism, the euro can’t gett the upper hand against the US dollar. Dollar is dominating today on the news that the Federal Reserve is preparing to taper its bond purchase programs. With the United States getting ready to move out of quantitative easing mode, the euro, which still has enough issues that more easing might be required, doesn’t really compete.
Also, the risk aversion brought on by the announcement isn’t helping.
At 15:26 GMT EUR/USD is down to 1.3120 from the open 1.3220. EUR/GBP is up to 0.8535 from the open at 0.8523. EUR/JPY is down to 128.0720 from the open at 128.6075.
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