Posted July 07, 2010
During the currency trading session on Tuesday, the US dollar fell. US data continues to cast fear over recovery.
US Dollar Value Falls
Out of New York came a lowering in the value of the US dollar. The dollar fell to eight week lows for the day against a basket of major currencies around the world. The dollar fell after more disappoint news was announced in the service sector of the US economy. It showed that a country economic slowdown may still be in the works rather than the recovery that many experts were hoping for. The US service sector saw growth in June but at a much lower pace that that which the experts were expecting. Non manufacturing activity reports indicated that in May, the industry moved from 55.4 to 53.8.
During the trading day on Tuesday, the US dollar fell to levels it has not been at since May 21st against the euro. Some of the losses were pared during the afternoon trading session, though. The euro was able to reap some of the rewards, as investors take a second look at the euro zone debt problems. The euro’s improvements, though, are mostly due to the economic reports out of the US that have occurred over the last several days.
Investors are turning from the US dollar as the disappointing economic news continues to be reported. Investors are paring back their investments against the US dollar as it appears that the recovery may be slower than what was expected.
Also notable during the trading day on Tuesday was information from the Reserve Bank of Australia. Analysts listened carefully to any sign of an economic recovery in that country as well. The statement made by the Reserve Bank allowed investors to have cautious optimism. That helped to improve all of the currencies that are based on commodities, including the Canadian dollar and the Australian dollar, as compared to the US dollar.
The Australian central bank did not change the key interest rate. However, it did note that global growth specifically in Asia is helping to support the demand for commodities. The news helped to push the Australian dollar higher. It rose by more than 1.2 percent on the day, while the US dollar fell about one percent against the Canadian dollar.
By The Numbers
By the end of the trading day in New York on Tuesday, the values of several currencies rose significantly or fell significantly. The euro moved from US $1.2541 as of late Monday to US $1.2619. The euro moved from Y 110.02 to Y 110.42. The US dollar moved from Y 87.75 to Y 87.48 for the day. The US dollar moved from CHF 1.0642 to CHF 1.0595. The UK pound moved from US $1.5135 to US $1.5142.
The ICE Dollar Index, which compares the US dollar against a trade weighted basket of currencies moved the US dollar’s value significantly. It moved from 84.573 to 84.076. However, earlier in the day, it had moved the currency to 83.825, which is the lowest level the ICE Dollar Index has been at since May 10th.