As Stocks Struggle Dollar Gains But Greece Plagues
On Friday, stocks fell mainly because the dollar gained again. The dollar dragged down commodity prices. Investors moved away after pushing the markets close to 18 month highs just Thursday, but the dollar’s increasing value was a concern to pull them back again.
The dollar managed to rise against all major currencies in trading on Friday. The main fuel behind the move was the same as the day before. That is, Greek debt concerns seemed to hold back the euro and sent investors looking for safer ground.
The dollar moved up 0.5 percent against the euro on Friday. That moved it to $1.3539 by the end of the day. Against the British pound, the dollar increased by 1.5 percent, a significant jump by all means. It stood at $1.5017 as of the end of day Friday. The dollar moved up to yen 90.49 against the yen, which was an increase of 0.1 percent.
Not only did stocks in the United States take a hit, but so did oil. Greek debt woes seemed to push the dollar higher against the euro. That lead to crude oil prices to fall $1.52, to $80.68 a barrel which was the lowest level crude oil has been in six weeks. The price drop is due to the rise in value of the US dollar. When the dollar is stronger, it becomes more expensive to foreign investors. Since crude oil is priced in US dollars, this causes a downward movement of the price globally.
The euro zone is hurting mainly because investors are leery of Greek debt complications. In fact, news out on Friday indicated that the euro zone is no longer attractive to countries who have been considering joining. The 16 countries currently in the euro zone have experienced an intense recession and three of them have had to turn to the International Monetary Fund for aid. With Greek’s debt concerns on the minds of investors, the euro continues to fall in trading this week.
The euro fell to its lowest point in the last two weeks against the US dollar. The fact that euro zone leaders have yet to provide a solution to the Greek debt issues has concerned many investors away from the currency.
In other currency news, the Swiss franc moved up for the sixth day in a row. The Swiss National Bank is likely to end its current currency policy in the hopes of curbing the country’s continuous currency appreciation.
The Canadian dollar continues to move closer to the US dollar. The currency traded in a range of Canadian $1.0207 and Canadian $1.0870, since February.
The Australian dollar also is struggling, mainly due to the Greek debt concerns. However, in a week in review, the Australian dollar finished off the week nearly unchanged against the US dollar. There were some economic factors that seemed to dampen the outlook of many currency investors over the last week. Still, like most other markets, what happens in Greece will play a role in the Australian dollar’s movements in the coming week.