EUR Struggles as Risk Aversion Dominates the Market
November 20th, 2009 Posted in Euro-Zone
The European currency slumped Friday as waning confidence about the global economic outlook prompted investors to seek refuge in the U.S dollar and Yen. The EUR slipped to below $1.49 down 1% from yesterday. The EUR was also down 0.3% at 132.31 yen after dipping close to its 200-day moving average at 132.13.
A drop in demand for risk triggered an overnight sell-off in global equity markets as well as in oil, gold and other commodities. Declines by oil and gold reinforced support for the low-yielding currencies, putting more pressure on the European currency.
The currency pair remains trapped in a stalemate between support at $1.4800 and resistance at $1.5050 strategists said, with only bullish U.S. data and equity possible triggers for a break-out to the upside. The Euro-Zone currency was is headed lower vs. the USD as investors remain sensitive to recent efforts by the European Central Bank to talk the single currency down to support export-based economies.
