Euro Comes Out Strong Amid US Uncertainty
Benzinga | Oct 23, 2013 12:32AM ET
The euro was strong against the dollar on Tuesday morning as markets prepared for the release of delayed US data.
The US Federal government shutdown kept several key pieces of data from being released at the beginning of the month, namely nonfarm payrolls. The payrolls data is due out on Tuesday and many expect the data to show a modest improvement.
However, Tuesday's data will be a picture of September's activity; which will leave markets to wonder about the scale of the damage done by US politicians' infighting over the debt ceiling until October's payrolls report is released on November 1st.
Uncertainty in the US has caused the dollar to plummet and in turn, the euro to climb. The common currency has become somewhat of a safe haven with the political drama in the US keeping markets on edge. Although the US budget showdown has been resolved, most see the last minute agreement as simply kicking the can.
Democrats and Republicans in Washington narrowly avoided a sovereign default by passing a temporary budget to fund the government and extending the nation's borrowing authority until early 2014. With the budget decisions merely being put off until 2014, most investors are wary of the dollar as some expect to see a repeat of October's brinkmanship.
The euro has risen as an unlikely choice for investors looking for safe bets after facing worries that the currency would fall apart just months ago. Businessweekreported that the euro had the best performance in a basket of 10 developed market currencies, up 5.8 percent. By contrast, the dollar has only gained 1.7 percent according to the index. Moving forward the flood of US data is likely to get markets thinking about the possibility of a Federal Reserve taper, which most aren't expecting until 2014.
BY Laura Brodbeck
Get The News You Want
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.