The U.S. dollar is expected to hold its own as a safe-haven currency in the near term as risk aversion in the global financial markets remains amid the euro zone's troubles.
The U.S. dollar’s status as a safe-haven currency in risk aversion mode gains momentum again, as investors avoid risky assets amid intensifying concerns over the euroarea crisis. Besides, other safe-haven currencies such as Japanese yen (JPY) and Swiss franc (CHF), which also attract investors’ attention in risk-off environment, seems to be out of favor as their respective central banks doesn’t intend to see them appreciate.
The euro (EUR) rose against its major counterparts on Tuesday following the release of better-than-expected growth data in Germany and eurozone, although concerns over Greece exiting the eurozone remain intact weighing on the single currency.
The downtrend in the euro (EUR) seems set to last in the coming weeks as the single currency continues to come under pressure due to political uncertainty, sovereign debt crisis, and deepening recession in the eurozone.
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The euro continued to weaken against the British pound to reach a near-two-year low on Wednesday, after the release of dismal economic data showing that the region is heading towards a deepening recession.
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The April outlook for British Pound Sterling is expected to be resilient, mainly due to recent PMI data releases about services sector, construction and manufacturing of the UK economy and also struggling eurozone economy.
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The wife of the former Swiss Central Bank chairman, Philippe Hildebrand, has made a robust defence of the dollar trade that profited the family Sfr64,000 and forced her husband to resign.
There were panic reactions with stocks falling across the board over fears of political instability in the region.
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A weak global economy will put downward pressure on Britain's high rate of inflation and as a result the sterling will have to remain weak, according the newest policymaker at the Bank of England Ben Broadbent.
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Some of the heat has come out of the Aussie over the last 24 hours after the RBA doused expectations of two further rate hikes this year. This could see the Aussie come back to test support at 1.0600. After seeing a move back to 1.0600, traders could then be looking to a bounce from support.
The pound has lowered to a one week low versus the dollar today amidst further evidence that the Bank of England are to keep interest rates low. The signs of 'softening' confidence in the economy is leading the central bank to lower its forecasts for next year to 2.5 pct from 3.4 pct in May.