By Andy Scott, premier account manager at currency specialist HiFX
The US Dollar has once again reclaimed its status as the currency of choice for fearful investors as Europe teeters on the edge of the unthinkable, a country exiting the single currency.
The possible outcomes of an exit are well documented but the truth of the matter is, no-one really knows just what all the implications would be were it to happen. With so many banks and arguably at least a few sovereigns in very poor financial health, such an event could have disastrous consequences, hence the need to find a safe place for capital.
The Dollar has gained around 4% against its major counterparts so far this month and with no sign of an imminent solution to the numerous issues in the eurozone, we expect it to continue to make gains.
Despite Sterling having the edge over the Euro, arguably the recent rally to 1.63 priced in that Sterling has flexibility by not being in the Euro. But on balance, the improvement in economic data stemming from the US means the Dollar looks not only the safest bet, but the best one too given the global economic conditions.
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