Posted June 28, 2010
Euro moves up as stocks seem to improve. US Dollar falls against pound.
During the Friday currency trading session, the US dollar fell against the UK pound. Also notable was the improvement in the euro, which was spurred by improvements in the stock market. Risk sensitive currencies all improved during the trading session as safer currencies, such as the US dollar, fell back.
As investors sat and waited to learn of any economic or financial information to come from the G 20 leader meeting occurring in Toronto, taking on more risk was the movement for the day. The euro kept up with the same pattern it has had throughout the week. During the trading session, the euro fell during the Asian and later the European trading sessions. However, it improved during the North American trading session. Asian markets do not seem to prefer the riskier currency of the euro.
One of the reasons the euro seemed to improve during the session was improvements occurring throughout the day in US stocks. The Dow Jones Industrial Average moved into positive territory on Friday, cutting some of its losses from earlier on. However, right before the close of the stock trading day, the Down Jones Industrial Average did fall back into the red for the day.
The highest point the euro reached for the day was US $1.2396 before cutting back some of these gains. The afternoon trading session was all about risk appetite for the traders in North America.
By the Numbers
The by the end of trading on Friday, the euro moved from US $1.2328 as of late Thursday to US $1.2388. The euro moved from Y 110.28 to Y 110.56. The US dollar moved from Y 89.39 to Y 89.26. The UK pound improved against the US dollar from US $1.4924 as of late Thursday to US $1.5062. The US dollar moved from CHF 1.1024 to CHF 1.0927 for the day. The ICE US Dollar Index moved the dollar from 85.760 as of Thursday to 85.270.
The UK pound did particularly well against the US dollar during the trading session. This was due in part to a short term euro interest rate move to higher levels. However, investors seem to be looking more positively of the pound now that a new government is in place and confidence is improving.
The Swiss franc also improved during the day. The euro fell against the Swiss franc to all time lows on Friday. The most recent low was set at 1.3456 franc. However, this improved during the session, especially as there was improvement in the euro against the US dollar during the afternoon trading session.
Group of 20 Nations
The G-20 conference occurring in Toronto is expected to affect the markets in the coming days. The group of leaders is expected to offer regulatory reforms and even to consider a global bank tax. Investors will be carefully monitoring these announcements to ensure that they are positioned for any negative or positive news from Toronto.