EUR/USD has sold off further in early European trade, presently at 1.3930. Risk aversion has been ratcheted up a couple of notches. Traders will have noted two AEP articles in The Telegraph, one highlighting the ongoing problems in Latvia, the other the deepening credit crisis in Germany.
The USD will also be garnering some underpinning from comments made by Russian Finance Minister Kudrin at the weekend. Russia has confidence in the dollar and there are no immediate plans to switch to a new reserve currency.
Couple of geo-political factors are also being thrown into the mix, the increasingly virulent sabre rattling coming from North Korea and the post-election civil unrest being seen in Iran. It has just been reported Iran’s Interior Ministry is labelling a pro-Mousavi rally in Tehran “illegal.”
Technical support for EUR/USD comes at 1.3910, resistance at 1.4000.