Posted June 19, 2010
During the Thursday currency trading session, the US dollar fell. The euro managed a rebound.
The euro was able to improve against the US dollar during the Thursday currency trading session. This was possibly mainly as investors watched and wondered about the Spanish bond auction occurring today. Spain managed a successful auction and that helped to ease the fears of investors that the euro zone debt was controllable. Euro zone debt has held the euro back in the weeks leading up to this.
As a result of the positive results in Spain, investors once again turned to more risky assets during the day's trading session. The euro did manage to reach as high as US $1.2413. This is the peak level it has been at since May 28th. However, the euro was unable to hold on to this high improvement. News that the Down Jones Industrial Average had fallen into negative territory again pulled back the euro by the middle of the day.
The euro was bolstered by the fact that Spain had better than expected results in their auction. This helped to give investors a bit of reassurance that the country was not headed to the same result as Greece. However, not all investors are confident that such a statement can be made, believing that more time was needed.
As is normal for the euro lately, news out of the US has helped or hurt the common currency. On Thursday, there was further information released including a private index of US leading indicators. The Federal Reserve Bank of Philadelphia released the report which offered a dampened manufacturing report. This caused the fall in the Dow Jones Industrial Average and the fall away from the euro by the end of the trading session.
By the Numbers
By the end of trading on Thursday, the following was the result. The euro moved from US $1.2311 as of late Wednesday in New York to US $1.2388 at the end of Thursday. The euro moved from Y 112.56 to Y 112.72. The US dollar moved from Y 91.42 to Y 91.00. The US dollar moved from CHF 1.1297 to CHF 1.1119. The UK pound moved from US $1.4737 to US $1.4820. The ICE Dollar Index moved the US dollar from 86.142 to 85.657.
Canadian and Australian Dollars
The Canadian and Australian dollars, which are considered risk sensitive currencies, did not see the same improvement as the euro did during the trading session. The implication of this lack of improvement in these currencies signals that any confidence in the currency market was limited to the European area currencies. Accordingly, the UK pound was able to improve for the day as well.
Also important during the Thursday currency trading session was the Swiss National Bank's apparent softening of the franc's appreciation. Previously, the Swiss National Bank was intervening in the markets to hold back the appreciation of the currency, but this was not apparent during the day's trading session in which the currency had appreciated to CHF 1.3772 by the afternoon trading session.