Dollar Down On Better Economic Data
During the Wednesday currency trading session, the US dollar fell significantly as better global manufacturing and employment data was released. However, a report out denying that the US would help to prop up European debt was denied by the US Treasury department during the trading day.
In addition to these factors, the US dollar did fall back against the euro as currency traders stopped focusing specifically on the peripheral euro zone government bonds, something that has been weighing the euro down considerably. Instead, investors were looking forward to Thursday's European Central Bank meeting and waiting anxiously for additional information.
A report issued by Reuters on Wednesday indicated initially that the US government was considering pledging additional funds to the International Monetary Fund to help provide additional stability to the euro zone, including the European Financial Stability Facility. The US Treasury said, though, that this was not true.
The US dollar index moved the US dollar from 81.311 as of Tuesday evening in North American trading to 80.734 by the end of trading on Wednesday.
During the trading day, the euro moved from US $1.2986 as of late in the day in North American trading on Tuesday to US $1.3129 by the end of trading on Wednesday. The euro initially was improved to a higher level after the release of positive US economic data during the early part of the day, which investors hoped would shed more positive light on the employment data that is due out on Friday. On Tuesday, the euro had fallen to US $1.30 during the day.
The UK pound also rose in value against the US dollar during the currency trading day. It moved from US $1.5572 as of late on Tuesday to US $1.5612 as of the end of trading on Wednesday. Against the UK pound, the euro improved from 83.44 as of late Tuesday to trade at 84.07 by the end of the trading day.
The Bank of England is likely to continue to hold off in its pursuit for using quantitative easing to help improve the value of the UK pound. This came after unexpected strong data showed that the purchasing managers index for manufacturing sector had improved.
The US dollar improved somewhat against the Japanese yen on Wednesday. It moved from Y 83.65 as of Tuesday to Y 84.16 as of the end of trading on Wednesday.