The market continues to trade in the light of the weak U.S. jobs figures seen on Friday as Asian markets set the tone for a downbeat start and losses extended in European equities, all evaporating whatever hope was left over the outlook for the global economic stability.
We can see the sentiment shifting to jitters and fears as the focus returns on haven assets amid growing fears over the slowing recovery in the United States and a possible relapse into a recession.
The dollar is still weak and the market is merely correcting the heavy losses seen, especially after the morning losses, as the dollar reverses back into gains on correctional moves and with the lack of major releases today.
The dollar index that tracks greenback's performance rebounded from the low of 73.63 to trade now around 73.86 slightly off the intraday high today set at 73.88.
We can see the dollar correcting the losses endured in the past sessions, and especially after it hit a one-month low versus the euro earlier today. The EUR/USD moved to the upside this morning to the highest in a month at 1.4657 on optimism over the EU's support behind Greece and the conclusion of a positive review to the Greek's economic progress and also with expectations that the nation will receive another bailout especially as the EU and the IMF agreed to pay the next installment payment for the nation under last year's bailout easing the jitters that dominated in the previous period.
The euro lost momentum from the highest reached as said above to fall to the intraday low versus the dollar at 1.4595 and now hovering around those areas at 1.4601. The move is merely correctional as the euro gathers more momentum to continue the upside move expected for this week and ahead of the ECB's decision and expectations for a prevailing hawkish bias by the European Central Bank.
For sterling, the scenario was the same with the sensitivity to the market movement and the losses in equities where the pound surrendered to the correction and the rebounding dollar from oversold areas. The GBP/USD fell from the intraday high of 1.6459 to trade around 1.6395 off the low set today at 1.6390.
The Japanese yen on the other hand is still holding to some of its gains and hovering around 80.16 from the high of 80.39 and the low of 79.95. The pair was marginally stable and trading within a tight range compared to other majors as the yen maintained its strength versus the dollar on the risk aversion seen and losses across equities which power the yen to gain versus the 16 major traded counterparts.
The volatility is likely to remain into the U.S. session with the lack of the data from the United States, yet the dollar is expected to return to its frail state on the back of the weakening recovery and expectations for the Feds to maintain its loose monetary policy for now, subtracting the appeal of the dollar against its rivals with central bank decisions ahead this week.