Posted September 22, 2010
US dollar fell significant on Tuesday. The Fed meeting information showed that the Fed was ready to move if needed.
Investors looked to the meeting of the Federal Reserve during the trading session to know how to move during the trading day. The Federal Reserve issued a statement that it was ready to offer stimulus to the United States economy if it was necessary to do so. That led investors to sell off the US dollar significantly.
The Fed statement confirmed that a double dip recession, which many economist had predicted, is no longer likely, saying that it was “off the table.” This pushed investors to no longer hold back on investing as they had been doing. Investors had been planning for the worst situation possible while staying away from the euro. However, with the positive news that a double dip recession was not likely, investors sold off the US dollar to head for more lucrative investments, including the euro.
The euro rose significantly during the day’s trading. It was able to gain more than 1.5 percent against the US dollar.
Investors are still watching to find out if the Japanese government will continue to intervene in the value of the yen. During the trading day, the US dollar fell against the yen significantly, below the Y 85 level that many investors believe is the threshold for further involvement by the Japanese government. Last week, the government intervene heavily in the market to try and hold back the advancing yen.
The Australian dollar also did well against the US dollar. Since the Australian dollar is closely tied to economic global growth, it did well during the day and hit two year highs against the US dollar. During the day, it moved from US $ 0.9473 as of late Monday to US $ 0.9566 at the end of the trading day. That is the highest it has been since July 29th of 2008.
By The Numbers
By the end of the trading day in New York, the euro had moved from US $1.3061 as of late Monday to US $1.3247. The euro moved from Y 112.02 to Y 112.75. The US dollar moved from Y 85.75 to Y 85.12. The US dollar moved from CHF 1.0052 to CHF 0.9976. The UK pound moved from US $1.5552 to US $1.5627. The ICE Dollar Index moved the US dollar from 81.324 to 80.442.