Posted May 28, 2010
During the currency trading session on Thursday, the euro was able to make somewhat of a comeback during the day. US stocks improved by mid afternoon trading.
Stock Market Helps Currency Market
During the trading session on Thursday, the US stock market rose. The stocks rose throughout the morning session and into the afternoon session. This, in part, helped to fuel the risk appetite of the currency traders. As a result, the US dollar fell during the Thursday morning session. Investors were happy to see improvement.
During the early morning trading session, the Dow Jones Industrial Average skyrocketed by 221 points, which is an increase of 2.2 percent. It moved to 10195, well above the psychological number of 10,000. It fell below that target number for the first time since early February during the Wednesday trading session. Technology components took the lead during the trading, but all of the Dow's 30 components were in the black for the session.
The euro was able to move ahead during the afternoon session. This was fueled by various components, but mainly because of a drop in the focus on the euro zone debt crisis. During today's trading session, worries about euro zone debt seemed to fall back some. The day's trading allowed the euro to move from US $1.21913 as of late Wednesday during trading to US $1.2370 during the afternoon session.
Investors are looking toward a week ending that will bring the euro up again, though there is no ability to know this for certain, especially since the movements of currency investors for the last few weeks has been based on limited information and fear. Risk still will play a role in future movements within the markets, investors warn.
Although the stock market improved for the day, the investors did learn of some rather disappointing news about the US economy. The economic data out of the Commerce Department focused on the gross domestic product. According to the organization, it was necessary to revise the estimation made for the first quarter gross domestic product. The Commerce Department lowered it to 3.0 percent annual rate. It had previously listed the GDP as 0.3 percent.
In addition to this, currency traders were watching the movements within the country. Information was provided that the number of workers in the United States filing new claims for unemployment benefits fell by less than what was expected. These claims fell, but the number of manufacturing activity gained in May, though at a slower pace. This information is vital to determining the movement of the country's economy. The Federal Reserve Bank monitors and releases this information.
Also important during the day's currency trading session was information about the Brazilian real. It closed stronger against the US dollar during the trading session. Specifically, the real gained after a story was released and China denied it, stating that the country plans to avoid euro zone assets. Also, the unemployment data out of Brazil was higher.
The real moved from BRL 1.8430 as of Wednesday's close to BRL 1.8150 against the US dollar.