Posted February 18, 2011
US dollar down on data. Franc up as safety net.
During the Thursday currency trading session, the US dollar turned lower against many of its rival currencies, including the euro. This came as more unrest in the Middle East shook traders to more safety, but instead of turning to the US dollar, many turned to the Swiss franc. A report out from the US showed that US consumer prices rose in the mount of January, to a higher level than was expected. In addition, a report out showed that stronger than expected regional manufacturing was occurring as well.
The US Department of Labor reported that consumer price indexes for the month of January were up 0.4 percent for the month. In addition, core prices also rose by 0.2 percent. This information suggests that the Federal Reserve may have waited too long to tighten up monetary policy within the country, which would keep inflation under control, many experts stated. In addition to this, another report indicated that first time claims for jobless benefits were up to 410,000 people for the week, which is up by 25,000.
The US dollar moved from 78.240 as of the end of trading in North America on Wednesday to 77.987 for the day on Thursday, according to the US dollar index.
The US dollar turned lower against the euro during the Thursday trading session. The euro moved from US $1.3566 at the end of the North American trading session to US $1.3607 by the end of trading on Thursday.
The US dollar also fell against the Japanese yen for the day. The Yen moved from Y 83.62 at the end of the Wednesday trading session to Y 83.32 at the end of the Thursday session in North American trading.
The Swiss franc became the safety net for investors moving out of the more risky currencies during the turmoil of the Thursday trading session. Both Iran and Bahrain were experiencing significant conflicts and protests, some of them turning violent, that caused concern for investors. Against the Swiss franc, the US dollar moved a full one percent lower for the day.
Also notable during the Thursday trading session was the movement of the UK pound. The currency did improve for the day after remarks from the Bank of England were released. The currency moved from US $1.6094 at the end of the Wednesday trading session in North America to US $1.6177 for the Thursday session.