Posted August 24, 2010
The euro fell against the yen and dollar. Investors are remaining cautious with investments.
During the currency trading session on Monday, the euro fell against the US dollar and the Japanese yen. In many ways, the concerns and cautious of the previous week once again held these currencies back from expanding during the session. Global growth continues to be one of the biggest factors for investors during the day. This was only made worse during the session when the euro zone data revealed even more concerns.
During the trading day, one of the most important factors was the yen. The yen improved against the US dollar during the day. This moved it to further gains made by investors. This occurred after there was more speculation that Japanese leaders were unlikely to take action in regards to the slow appreciation of the yen's value, which many investors believed was likely to happen.
During the trading day, the euro seemed to be the most vulnerable of the currencies, mainly because of the low volume in the late summer vacation season. Investors still remain guarded about the potential slowdown in growth too, making any movements in the market more exaggerated with the low volume. Nevertheless, during the currency session, the euro moved to near two month lows against the Japanese currency. It also fell to five week lows against the US dollar.
Nevertheless, each of the euro zone countries are doing work to reduce their deficits and trying to improve the overall impression of the euro zone as a whole. However, data out of the euro zone showed that the private sector did not expand as fast as it was expected. It improved by a slower pace in August. This was held back by the lack of service and manufacturing sectors positive growth. Further, the European Central Bank also noted that some of the more conservative members were suggesting that the ECB offer unlimited liquidity for the region's banks throughout next year.
The Swiss franc also was a player during the currency trading session on Monday. Specifically, it fell against the dollar and the euro during the day. The Swiss franc is often seen as a safe haven for the investor in less than certain times. However, speculation that the Swiss National Bank was intervening in the markets in March of 2009 held back the currency during the day. It is believed that the bank stopped doing this in June of this year, which could be a reason why the value dropped during the day.
By the Numbers
During the currency trading session, the euro fell from US $1.2706 as of Friday to US $1.2665. The euro moved from Y 108.71 to Y 107.95. The US dollar moved from Y 85.75 to Y 85.25. The US dollar moved from CHF 1.0375 to CHF 1.0405. The UK pound moved from US $1.5490 on Friday to US $1.5520 during the Monday session. The ICE Dollar Index moved the dollar from 82.437 to 83.143.