Mixed currencies amid high uncertainty

By @ibtimes on

The U.S. dollar fluctuated heavily today, leaving other currencies very volatile, yet the dollar started to gain momentum as we noticed, forcing downside pressures on other major currencies and on commodities also, as investors hold the low yielding currency as a safe haven amid the high uncertainty in the market in addition to the huge losses seen in global equities.

In general, the European debt crisis remains the main focus in the market, especially after the euro-area finance minister failed to quell jitters and fears and reached no agreement regarding the next tranche for Greece, yet delayed the decision till November, awaiting the international lenders inspectors' (International Monetary Fund, the European Union and the European Central Bank)report, which is related to the implementation of the austerity measures and spending cuts.

Greece announced that the government will miss budget targets this year and next year due to the economic slowdown, where the country also expects to reduce the deficit to 8.5% of the total GDP this year, compared with international lenders target of 7.6%, while in 2012 the deficit will be 6.8% compared with international lenders' target of 6.5%.

Pessimism is still dominant in the market, affected by the speculations over a Greek disorderly default, which weighed negatively on the common currency, which fluctuated heavily today.

The U.S. dollar index (USDIX) advanced after opening the session at 79.64, and recorded a high of 79.81 and a low of 79.40 and is currently trading around 79.74.

On the other hand, the euro also fluctuated heavily against the dollar during the session today, where after opening the session at 1.3173; the pair advanced to a high of 1.3226 and then retreated to a low of 1.3145, and trades now around 1.3171 at the lowest level since January.

The sterling pound retreated sharply against the dollar and the euro, where after opening the session at 1.5431, the GBP/USD pair retreated to a low of 1.5364. The pair also reached a high of 1.5463 and is currently trading around 1.5380.

Concerning the EUR/GBP, the pair inclined sharply reflecting a weakening pound, where after opening the session at 0.8537; the pair reached a high of 0.8586 and is currently hovering around 0.8566.

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