U.S. Dollar Strengthens on Risk Aversion in Forex Trading

Financial markets show risk aversion, sending greenback higher in currency trading.The U.S. dollar is strengthening in[B] forex trading[/B] on the currency market this morning, thanks to a strong dose of risk aversion. Indeed, the greenback is higher in currency trading against the euro and the sterling on the fact that there is concern over the U.S. trading spat with China.

For now, [B]forex traders[/B] are ignoring signs of economic recovery and focusing on the issue of the moment. It is little surprise, though, since the U.S. - China trade relationship has huge consequences for the global economy. GFT’s[B] Boris Schlossberg [/B]comments in FX360 on the effect of the spat on the dollar in forex trading:

The dollar strengthened against all the [B]high beta currencies[/B] at the start of week’s trade as risk aversion sentiment immediately swept through the market. The buck has been battered over the past several weeks on broad consensus that sustained improvement in global economic conditions was in process but [B]today’s developments posed the first serious threat to the recovery trade [/B]if tensions between China and US continue to escalate.

Indeed, it will be interesting to see how things progress. If things smooth out, the economic data expected later this week should help [B]risk appetite[/B], and signal a return to gains by the sterling and euro in forex trading.

[B]See Also[/B]

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[li]U.S. Dollar in Forex Trading[/li]Currency trading news for forex traders
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