Posted January 14, 2011
US dollar down. Inflation a concern.
During the Friday currency trading session, the US dollar fell for the fifth day in a row. It moved only slightly lower during the Friday session, however the US dollar index did mark a loss for the week for the currency. Investors continue to watch and wait in the markets. A significant amount of financial and economic data out of the US continues to puzzle and worry investors, including data that showed that the industrial growth occurring in the US was higher than what many investors expected. That, and an expected rise in inflation also affected the currency during the day. However, most interestingly was a report that indicated that consumer sentiment fell during the previous month, something that was considered unexpected in the market.
The US dollar index moved from 79.163 at the end of the currency trading session on Thursday in North American trading to 79.093 by the end of the trading session on Friday. For the week, the US dollar index moved down two percent for the week.
During the session, the US dollar did improve as the Labor Department showed that consumer prices increased by 0.5 percent in the month of December up from November.
During the currency trading session, the euro moved up against the dollar. It moved from US $1.3358 at the end of the session on Thursday to US $1.3376 by the end of the Friday trading session. During the day, it did fall as low as US $1.314 during the session.
One of the factors keeping trading against the US dollar within line was that investors were weighing in more so on European Central Bank President Jean Claude Trichet’s comments made on Thursday. At that time, he said that the European Central Bank was ready to act against the inflationary factors if necessary. However, on Thursday, he noted that the current interest rates set by the European Central Bank were appropriate for the time being. Investors hope to see these rates increase to increase profit margins.
Also notable in the Friday trading session was that the Swiss franc fell during the session against the euro. The euro improved 0.2 percent to 1.289 for the day.
Against the yen, the US dollar improved for the day. It moved from Y 82.79 at the end of the Thursday currency trading session in North America to Y 82.94 for the day on Friday.