Posted February 08, 2012
It turned out to be a week filled with challenges on the currency markets for the US dollar. The Euro was still struggling over in Europe, but could the US greenback take advantage of it and rake in some better exchange rates?
Monday’s session saw the US dollar garner a slight increase against the troubled Euro. It didn’t amount to much but it pushed ahead to 0.7627 from 0.7607. The dollar struggled against the Japanese yen though, grabbing nothing more than a disappointing 76.68 at the end of the day. The lowest point of the day was 76.20 however – the lowest level the US dollar has been seen at for a full three months. It wasn’t all bad news though as the dollar managed to put the pressure on the Chinese yuan, pushing up from 6.3138 to 6.3186 in the process.
It was a brighter day for the Euro at least, as discussions on Greek debt continued and looked to bring forth some hope for a resolution. By the time the day was over the dollar could only grab a rate of 0.7589 against the Euro, indicating the relative positivity felt over the single currency at that stage. News reports indicated that the European single currency had dipped to its lowest level against the US currency in the last five days. However this is one situation that has the potential to change from day to day, leaving the US currency still able to fight back.
A new month begins, but would it bring new hope? Worries over the state of the dollar against the yen were still bubbling away, leading to questions of whether an intervention would be necessary to stabilize things. The dollar fell against the British pound too, dropping from 0.6338 the previous day to 0.6308 by the end of trading on Wednesday. Trading on base metals improved too, as did the dollars for Australia and New Zealand, leaving the US dollar looking under pressure. It also dropped against the Chinese currency, reversing the good news of the previous day.
The tough period for the US dollar continued as the week wore on. The Chinese government was speculating about the possibility of supporting the troubled Euro to a greater degree, pushing the single currency up in the currency markets as a result. This battered the US dollar even more, although it managed to finish on 0.7637 by the end of the day. This was marginally better than the 0.7590 it had finished on the previous day. However the Euro was seen to be struggling anyway as the debt talks over the Greek situation threatened to harm it even more. Clearly the US dollar had taken advantage of a bad situation.
Some good news to round off the week for the US dollar; it was able to make improvements against the Russian ruble as the central bank in Russia postponed any movement on its interest rates. US stocks did better than the national currency as good news regarding the jobs market hit the headlines. The dollar had dipped to 76.111 against the yen but it managed to pare its losses and soared back to 76.215 by the time the markets closed on Friday night. It also recorded minor gains against the Canadian dollar, rising from a little over parity to 1.0022 instead.