Posted June 14, 2012
For investors looking for an improvement in the risk sentiment, this week was the week for it. Although the downgrading of nine, euro zone nations worried investors at the start, and the continued financial struggles of Greece continued to weigh in, the euro did manage to improve for the day. More so, it improved for the week, pushing the US dollar lower. Investors were eager to take on the risk since most had a positive outlook on a solution for Greek debt occurring.
During the Monday trading session, all eyes were on the movements of the euro. The currency did manage to hold onto is ground even though a number of downgrades worried investors. The euro was at risk due to the continued concerns about Greece potentially defaulting on its loans. It was also at risk as the Standards and Poor's credit agency downgraded nine of the euro zone countries to lower credit ratings. The euro moved from US $1.2677 in late North American trading on Friday to US $1.2673 for the day. The US dollar bought Y 76.75 from the Y 76.9 it was at on Friday. The US markets were closed in observance of a national holiday.
At the start of the Tuesday trading session, the US dollar took a hit. The dollar fell as improved data out of China and Germany helped to encourage investors to take on some of the risk they were avoiding. As a result, the US dollar index moved the current to trade at 81.175 for the day. The euro managed to improve to US $1.2728 for the day as well. The economic good news helped to strengthen the mood of the markets globally. The US dollar bought Y 76.84 for the day as well.
The Wednesday session saw more of the US dollar falling. This time, the International Monetary Fund was behind the movements in the market. The IMF reported to drastically boost its lending ability. More so, there was a sense of optimism in the markets that Greece, which many investors worry is likely to default on its loans, would not in fact do so. Negotiations were occurring throughout the market day. The euro moved to trade at US $1.2852 by the end of the session. The US dollar index showed the currency at 80.540 by the end of the day. The US dollar managed to buy Y 76.79 for the day.
Thursday continued the week's advances of the euro. During the day, the euro managed to reach the psychological point of US $1.29 during the session on Greece optimism. Investors were also happy that there were buyers available to buy French and Spanish debt. This helped to encourage investors to move into more risky investments. The euro moved to buy US $1.2942 for the day. The US dollar index moved the currency to trade at 80.198 by the end of teh North American trading session. The US dollar bought Y 77.17.
By the end of the Friday trading session, the euro managed to improve again. The US dollar ended the week lower on improved sentiment throughout the market. Investors did adjust their positions heading into the weekend and the expectation that there would be a solution for Greek's impending financial stress. The euro closed the week at US $1.2936. The US dollar index would end at 80.148 for the week. There is no doubt that investors continued to be nervous about movements in the market especially with the Greek debt. The US dollar bought Y 76.90 as well.