Euro Down to 2 Month Low

Added: November 23, 2010

Euro falls during session. Investor worries continue to plague currency.

US Dollar

Investors turned to the US dollar during the Tuesday trading session. Those investors were seeking out the US dollar’s safer have status as compared to the risky currencies. This came after North Korea and South Korea exchanged military fire. Further concerns pushed the US dollar higher and the euro lower as turmoil in Ireland continued to brew.

The US Dollar Index moved the US dollar from 78.611 as of late in the day trading on Monday in North America to 79.716 by the close of trading on Tuesday.

Interestingly, there was a great deal of information to come out of the US during the day, though currency traders paid little attention to it. Data on existing home sales and a revised third quarter growth report were released. In addition, the release of the minutes of a recent Federal Reserve meeting were released. They showed the formal announcement of the bond buying program.

Euro

During the trading session, the euro turned to its lowest point in the last two months. This came after a speech by German Chancellor Angela Merkel indicated that the currency is facing an extraordinarily serious situation, referring to the risks in the Ireland and other euro zone country’s financial banking district.

The euro moved from US $1.3629 as of late Monday to US $1.3364 as of the end of business on Tuesday. The euro did manage to high US $1.3361 during the day’s trading which is the lowest it has been at since late September.

South Korea

After a day when North Korea fired artillery at a South Korean island, in a dispute over a maritime boarder, and South Korea returned fire, the markets plunged. The South Korean won fell by 2.5 percent in trading against the US dollar during the session.

Japanese Yen

Also notable was the turn in the Japanese yen. Due to the country’s location near the Korean problems, the yen initially lost some ground during the early part of the session. However, it bounced back. The yen, like the US dollar, is often seen as a safe haven for those who are investing in the currency market. The yen improved against the US dollar during US trading. The US dollar moved from Y 83.26 as of late in the day on Monday in North America to Y 83.13 by the end of the Tuesday trading session.

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Breakup of Euro-Zone

Posted by Andrew McCartney at Nov 29, 2010 04:38 AM

Ireland’s debt bailout is just another indication that the euro is in trouble. I was listening to an analysis of the future of the euro-zone by economists and financial experts. The discussion said the euro-zone could break up into the haves and have-nots. In other words, countries like Spain and Portugal would exit the euro-zone and use their own currencies again while strong countries like Germany would stay in. The UK may want Ireland to exit so the UK has more control over its loan it plans on giving Ireland. But it is possible the euro-zone will remain intact too. If it does, there is concern it could be weakened for the next 10 years if it is burdened with excessive debt. Doesn’t seem like there are good options any way you look at it.