Sterling, Euro Lower in Forex Trading

Both the sterling and the euro are lower in forex trading on on the currency market today. In currency trading, forex traders are showing signs of risk aversion as monetary policy proves ineffectual for these currencies.

The euro has been receiving a pounding because euro zone leaders have not been doing enough to stimulate the economy, and the sterling is lower because there are concerns that too much quantitative easing has been going on. 

Economic data on both fronts has been disappointing, and this leading to concerns that the economic recovery is moving too slowly for the tastes of investors. Sterling and euro usually do well when risk appetite is in vogue in forex trading. With the latest economic news, though, there is very little expectation that things will be getting better for these high beta currencies anytime soon. GFT's Boris Schlossberg lays out the situation for sterling and euron in FX360:

In the near term however, the high beta currencies could catch a bounce during the North American session if the ISM Services sector release beats expectations. Markets are forecasting a mild increase to 45.9 from 44.0 the period prior. If ISM does improve it could provide a foundation for an equity rally which backdrop the slide in risk FX for the day. However, if the data proves to be a downside surprise, the negative sentiment already present at the start of the week will only be exacerbated and both EUR/USD and GBP/USD could fall below 1.3900 and 1.6100 levels respectively.