Euro Smacked, U.S. Dollar, Yen Rise (FXE, UUP, FXY)

Euro Dollar tanks and U.S. Dollar and Japanese Yen rise as currency investors and speculators worry about Greece and the future of the Euro.

The Euro Dollar declined again today as concern about the growing likelihood of a bad ending in Greece rattled global markets.

Major Currency ETFs:

PowerShares Bullish Dollar ETF UUP up 0.15% to continue its recent turn after falling in January

Rydex Currency  Shares Euro Trust: FXE -0.12% to add to losses of approximately 5% since November.

Currency Shares Japanese Yen Trust: JPY -0.02% as the Yen takes a break from recent advances of approximately 5% over the last two weeks.

The Euro Dollar FXE has been in a steady decline since early November as the global financial community comes to realize that Grecce could, indeed, default. As that reality has taken hold, U.S. Dollars and Japanese Yen have reaped the benefits, rallying against the Euro and other currencies. The Euro currently trades at approximately $1.31 USD, perilously close to the psychologically important $1.30 level that many analysts expect it to breach in coming months.

In Japan, the Yen FXY continues its rise to levels that has the government considering additional intervention steps to keep the currency in line so that Japanese goods remain competitive in world markets..

The Euro FXE is down about 5% since its recent high in mid-November while the Yen FXY is up approximately 2% since late January.

Bottom line: While the Dollar and Yen have significant problems of their own, they're now being referred to as “the best houses in a bad neighborhood” and represent a flight to safety as investors worry about Europe.  If Greece goes down hill from here, we can expect more strength in these two currencies as the Euro falters.

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