Posted December 23, 2010
The US dollar edges up. UK pound falls as euro falls to two week lows.
During the Tuesday currency trading session, the US dollar saw improvements while the euro moved to two week lows against the US dollar. The euro briefly was able to recovery after comments from Chinese officials, but not enough to get ahead for the session.
The US dollar improved on the day as most of the focus in the markets turned specifically back to the sovereign debt concerns throughout Europe. This came after Moody’s Investors Service moved to lower the credit rating of Portugal, another of the countries many investors are worried about. The US dollar is perceived as a safer risk.
The US dollar index moved the US dollar from 80.611 at the end of the Monday session to 80.711 by the end of trading in North America on Tuesday. It did fall as low as 80.243 during the session.
The euro did move as high as US $1.3202 during the Asian trading session. Afterward, it slowed significantly. The euro moved from US $1.3123 at the end of the Monday session in North America to US $1.3096 by the end of the session on Tuesday.
One of the elements keeping the euro from falling lower were comments made by the Chinese Vice Premier. He helped by endorsing the European Union and the International Monetary Fund on the moves made to provide strength to the euro zone, specifically in the bail out aid provided. His comments also included information stating that China hopes that the steps taken by the EU leaders will help to provide the stability needed in the euro zone and that the action would have quick effect.
Still, the lowering of Portugal’s rating hurt the euro during the last portion of the day. Later in the trading session, Fitch Ratings also reduced ratings, after moving Greece’s BBB minus rating to the downgrade review. This is one step closer to the country’s credit rating moving lower. If it moves lower, it could be considered junk status.
Also notable during the Tuesday session was the falling of the UK pound. This came after the National Statistics revealed that public sector borrowing jumped unexpectedly high in the month of November. This moved the UK pound from US $1.5517 at the close of the Monday trading session in North America to US $1.5469 by the end of the Tuesday session.