Even though pro-bailout politicians won in the Greek elections over the weekend, the euro is heading lower against its major counterparts. Relief over the outcome in Greece gave the euro a boost earlier, but that quickly gave way as the spotlight turned to shine on Italy and Spain.
Euro is pulling back a little on uncertainty today. Euro was higher earlier on the news that central banks would coordinate efforts in the event that Greek elections go badly this weekend, but there is enough disquiet about what’s ahead that the euro is slightly lower.
Even though investors are sending stocks higher, there are plenty of concerns about the economy dragging down some of the high beta currencies, including the Canadian dollar. Loonie is down against the US dollar, heading lower on expectations of a slowing global economy.
Instead of seeing risk aversion today, there is a bit of risk appetite, and that is sending the US dollar lower against its major counterparts. Also weighing on the US dollar is the possible of an extension of Operation Twist.
UK pound is mixed today, gaining against the US dollar, but pulling back against the euro. Risk appetite is making a cautious appearance in the currency markets, even with trouble in the eurozone. Indeed, pound’s fall against the euro is a bit of a surprise after the British currency’s recent gains.
Euro is holding to earlier gains, and even building again, thanks to an appearance of risk appetite. Earlier, risk appetite faded a bit after US retail sales data, but now there appears to be a resurgence in a desire for riskier assets. The euro, as a result, is regaining its advantage against the US dollar.
Greenback may be lower against the euro right now, but it is already showing signs of drifting higher as risk aversion makes an appearance. Retail sales data in the United States was disappointing, and now riskier assets are losing ground. That means that the euro may not have the upper hand for much longer.
Aussie is finding support against other majors today, reversing earlier losses. Thanks to a little boost from gold, and Australia’s connection to the Chinese economy, Aussie is eking out modest gains.
Euro continues to struggle as debt concerns remain in the spotlight. The ratings agency Fitch has issued a warning that downgrades are possible for the AAA nations in the currency region.
Canadian dollar received a boost earlier, but the good news has since faded. A short-lived risk rally helped the loonie higher, but now concerns over what’s next for Europe have sent the currency down against the US dollar as uncertainty sets in and increases the demand for safe haven.
