Euro is turning lower today, after some gains earlier. Now, though, the 17-nation currency is falling back as Forex traders try to determine what might be next. Talks about combining bailout funds in the eurozone, as well as a bond sale today, are affecting the euro.
Initially, the euro got a bit of a boost on the news that bailout funds in the eurozone might be combined. German Chancellor Angela Merkel suggested that bailout funds be combined to more efficiently address the sovereign debt crisis, and prevent spread of the contagion that affected Greece.
However, a degree of caution has crept into the markets today. William Dudley, President of the New York Federal Reserve, cautioned that there are still difficulties to be faced by the US economy, and that is leeching away some of the former confidence, and weighing on high beta currencies.
Additionally, many Forex traders are awaiting the bond sale from the EFSF. The bailout facility is selling as much as 1.5 billion euros in bonds right now, and many are curious about the outcome of the sale. The move is meant to help raise more funds to shore up the eurozone.
At 14:12 GMT EUR/USD is down to 1.3154 from the open at 1.3188. EUR/GBP is lower at 0.8294, down from the open at 0.8317. EUR/JPY is down to 109.8440 from the open at 109.9080.