Euro, Sterling Retreat in Forex Trading

Both the euro and the sterling are lower today in forex trading as the U.S. dollar moves higher across the board. Uncertainty has made a return to the currency market as concern over the state of the global economy remains, in spite of leaders' assertions of "economic green shoots" and indications this past weekend that G8 leaders think that the recession is over.

Instead, there is concern that things aren't all the rosy. Commodity prices are dropping, and there is a movement toward safety as risk aversion sets in. In currency trading, the euro and the pound are both falling to the U.S. dollar. GFT's Boris Schlossberg reports and issues facing the currency market in FX360:

The weakness in commodity prices which has had a near parabolic run, in the past several months, also helped pressure the risk currencies lower. As we noted earlier, “ Oil has finally run into serious resistance at the $70/bbl level as investors question whether the rally can be sustainable under the current economic environment. With gas prices rising towards the $3/gallon level, at the same time as US unemployment approaches 10%, the likelihood of reduction in consumer demand appears to have increased.”