North-West Financial Broker
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09 Feb - Fundamental
The dollar slipped against the euro on Tuesday amid anticipation that European officials will help Greece lower its mounting debt.
What prices are doing: The dollar fell 1% versus the euro to $1.3785 and was down 0.75% against the U.K. pound at $1.5702. Against the Japanese yen, the dollar rose 0.4% to ¥89.59.
What's driving prices: The dollar fell on speculation that European officials meeting this week will agree to help Greece recover from its growing debt, boosting risk appetite among investors.
Stocks rebounded from the previous session's selloff, putting additional pressure on the dollar.
«We've had a little bit of a bounce in risk sentiment overnight and debt concerns have improved sharply,» said Brian Dolan, a chief currency strategist at Forex.com.
What analysts are saying: Dolan said the euro's rebound will likely be temporary and that concern about debt abroad will continue, even after the European Union meeting this week.
«I think there's going to be verbal support but no concrete action,» said Dolan. «Until there is a concrete backstop in place, this Greek drama is going to continue to drag on.»
Longer term, Dolan said he expects the euro will fall, pushing the dollar higher.
«The dollar is benefiting from increased risk aversion and it's also doing better from a relative growth perspective,» he said. «We're doing a little bit better in the U.S. with the stimulus and significant improvements in confidence gauges, whereas that is pretty much done in Europe and elsewhere.»
