Euro Becomes More Attractive To Investors

Speculative investors moving large sums of money are those who influence how currency markets are behaving and this week they are starting out in a positive and risk taking mood. In currency terms, this means that currencies seen on the risky side, such as the Euro, are strengthening at the expense of the safe-haven currencies including the US Dollar, Japanese Yen and Swiss Franc.

Why has this happened? A spate of positive data has shored up investor confidence that the global economy may in fact be recovering rather than heading for the much feared double dip recession.

Euro starts to pick up…but the Pound doesn’t follow

Currency movements continue to be dominated by the talk and data surrounding how fast economies seem to be growing or slowing. Last week saw a frenzy over speculation of a double dip recession with increasing signs of slowing economies particularly in the US and UK. This caused a boost in safe haven currencies but the new week is starting out on a different foot with the Yen, Swiss Franc and US Dollar sliding down from their highs.

The key piece of information which has caused a turn in the rates between this week and last was US jobless figures on Friday.

Euro Weakening as Investors Avoid Risk

Similarly to last week, currency movements in all major currencies this week are likely to be dominated by economic news coming out of the USA.
There is a continuing trend of poor US data bringing down currencies seen as risky – particularly the Euro, and pushing up currencies seen as ‘safe’ including the Japanese Yen and US Dollar itself; news from the US is continuing to be seen as a key indicator of the global situation in general which means that negative data from the nation is ironically not bringing down the Dollar.