Article Summary:

Online Forex Trading News, Anlysis, Tips, Reviews, and Videos.The immediate reaction at the open of the currency markets yesterday was to sell US dollars in response to the S&P downgrade of US credit.  This proved to be short-lived, however as this induced risk aversion which prompted teh flight to safety trade which, ironically, means


Article Content:
The immediate reaction at the open of the currency markets yesterday was to sell US dollars in response to the S&P downgrade of US credit.  This proved to be short-lived, however as this induced risk aversion which prompted teh flight to safety trade which, ironically, means buying US dollars.

In addition to this counter-intuitive logic, the ECB also stated that it would beging aggressive buying of Spanish and Italian debt, essentially embarking on their own quantitative easing measures to try to keep bond yeilds low.  This potentiallymeans that the Euro could continue to decline as more Euros flood the market.

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