Tue, 23 Nov 2010 11:03:00 +0100

European markets drop on debt concerns; Dollar remains strong

FXstreet.com (Barcelona) - European markets have opened Tuesday's session on sell tone, as risk aversion prevails on concerns about debt troubles spreading across Europe, and escalating tensions in the Korean peninsula. The Dollar has been favoured on higher demand for safer assets.

Eurostoxx 50 Index trades 0.6% lower, while the French CAC Index dips 0.5%, and the German DAX Index ticks 0.1% lower. In the UK, the FTSE Index trades 0.5% lower two hours after the opening bell.

Investors remain cautious to risk their cash amid fears of further debt problems among Eurozone members, with Portugal and Spain on focus. Furthermore news about fire exchange between North and South Korea in the Yellow sea have increased risk aversion.

The Dollar holds gains

EUR/USD decline from Monday's high at 1.3785 extended to 1.3525 on news about the incident in Korea, and the pair has picked up on early European session although the Euro remains unable to regain 1.3600.

GBP/USD remains trading between 1.5900 and 1.5950 after pulling back on Monday from 1.6085 high, and the USD/JPY spiked up to 83.80 to pull back to 83.30 area shortly afterwards.