(Mary McCarthy, Forex-FX-4X.com, 26/2/13)
The EURUSD currency pair declined to around 1.3046 on Monday, a six-week low, with market participants focusing on political developments in Italy. The drop today had the euro hit the lowest level seen since January 10th.
Heightened concerns around a potential deadlocked Italian parliament, which could pose a threat to Italy’s economic situation, and add to the Euro zone debt woes, has dominated risk sentiment on Monday.
Market participants have recently positioned themselves in the currency market with a view that the near term Euro zone crisis issues have been dealt with, and an element of position unwinding looks to be taking place. The US dollar often gains on perceived “safe haven” flows in times of uncertainty.
The Japanese yen has likewise gained across the board today, at one stage, gaining over 3% versus the euro.