Dollar Down on Data

Added: February 17, 2011

US dollar down on data. Franc up as safety net.

US Dollar

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 Euro

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.

Yen

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.

Swiss Franc

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.

UK Pound

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.

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Irish Bailout

Posted by Timothy Cain at Feb 26, 2011 09:52 PM

The Irish voting out the ruling party based on their distaste for the EU and IMF bailout took a lot of people by surprise it seems. Now I’m wondering what impact this will have on the euro. Kenny, who will probably be Ireland’s new premier, says he is already negotiating a new deal with the EU and the IMF. But that makes me wonder how he could already be negotiating when he just won the election. Seems a bit staged to me. The euro tanked last December when the Irish bailout vote was in question. Maybe the fact negotiations are already underway despite the fact Ireland’s populace has now voted out the party that accepted the bailout originally will prevent another big dip in the euro.

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Interest Rates - Who's Move Next?

Posted by Andrew McCartney at Feb 26, 2011 09:52 PM

Will the ECB or the U.S. Fed or the Bank of England raise interest rates first? It appears the U.S. will the last to do so as the economy continues to struggle. Most of the U.S. business growth is due to overseas operations. When considering that fact it wouldn’t be surprising if the BOE or ECB believed economic growth in their jurisdictions justified an interest rate increase. The Middle East crisis is keeping the dollar bullish but that’s not going to last. There is a pervading sense of doom about the U.S. dollar that it’s going to begin declining if the international crises ever stop.