Euro debt concerns enhance demand for safe havens

haven currencies.
The dollar index continues to surge on weak data in the eurozone.

The big factor was that of German Chancellor Angela Merkel’s party defeat in an election in her hometown that has spurred some euro selling.
Currently, the market is buying dollars, Swiss francs and gold, which has, since advanced to US$1 920 an ounce and the euro has been sold off.
The euro declined to US$1,4106 after touching US$1,4061 and dropped to 108.40 yen and also lost 1,10677 francs.

The yen was little changed at 76,89 per dollar. The dollar index which tracks the greenback against the currencies of six major US trading partners, climbed to 75,152 after rising to 75,319.
Positioning has turned against the euro and news flow isn’t helping we are seeing investors reducing their net long positions in the euro fleeing to other haven currencies like the Swiss franc and yen which tend to do well in times of financial turmoil.

After such scenes in German the market believes ECB response is critical in this week’s meeting to at least bring relief on all Eurobond holders.
The Australian and the New Zealand currencies dropped to the lowest level against dollar and the yen on events that took place in Germany.

Right now with the weaker than anticipated global growth the outlook is negative and could weigh on exports and commodities.
Aussie dollar fell to A$1,0568 from A$1,0645 against the dollar. It also dropped to a 81,08 yen from 81,75 yen.

The New Zealand dollar touched its lowest level since August 29 falling as low as 83,97 US cents and 64,46 yen.
It later traded at 84,09 cents from 84,81 cents and 64,56 yen from 64,14 yen. The US growth concerns and the eurozone debt concerns continue to overshadow markets.

The bullion has since advanced to record highs due events happening in and around the eurozone.
Gold continues to be supported by investors seeking to diversify from the volatile flows in equities and currencies.

World Bank president Robert Zoellick said in Beijing, “that the global economy is entering a new danger zone amid Europe’s debt difficulties”.
Looking at such issues in the eurozone, European investor confidence has fallen to its lowest level in more than two years.

What is happening on the markets is like pouring cold water on the markets with exchange rates swinging side ways, it really is frustrating for investors.
Traders are now looking to sell and seek re-entry points especially in the currency markets and also areas of opportunity.

Risk dynamics and commodity performance have proved to favour the US dollar overall performance at the expense of currencies like the Australian dollar, rand, New Zealand dollar and even the Canadian dollar especially in the past week.

Low interest levels in the US make the dollar ideal as a funding currency to buy high-yielding assets elsewhere.
Gold advanced to record highs as it touched US$1 920 an ounce on concern global economic growth is slowing down.

Europe’s problems have the capacity to drive the bullion upwards as investors seek to protect their wealth from financial losses.
My question is are we going back to the 2008 financial turmoil where volatile flows in equities and mainstream currencies were money-losing positions?