Posted June 09, 2010
During the currency trading session on Tuesday, the euro was able to gain some ground. It improved against the US dollar but fell against the Swiss franc.
Swiss Franc and Euro
Perhaps the most important piece of news out of the currency market for the Tuesday session was that the euro fell to all time lows against the ever improving Swiss franc. Against the franc, the euro feel to CHF 1.3746, which is a new record low for the euro against the franc. The euro would later move up as high as CHF 1.3800 during the session, but wound up ending lower. However, investors did catch the fact that the euro was able to move higher quickly, and at a large amount, which many believed to be caused by the Swiss National Bank's intervention during the market session. However, major international banks which do monitor the central bank said there was no indication that this involvement was in fact the case. Rather, it is believed that the high, fast jump was simply due to investors who were covering bets against the euro.
The currency market on Tuesday was one of mixed movements. There was no clear direction in place for most of the major currencies. Throughout the trading day, many of the major currencies would fluctuate. In most cases, the US dollar was in a retreat against the other major currencies for the day. This was bolstered by the end of day trading session in which some US equity markets managed to rally.
The dollar fell against the Canadian dollar, New Zealand dollar and the Australian dollar for the day. This was due in part to the fact that these countries are growth sensitive, meaning that the value of these dollars rises and falls with the growth of the country and global economies. The confidence in these dollars was also bolstered by the fact that many believe the Reserve Bank of New Zealand
could pair with the Canadian central bank and raise key lending interest rates in the near future.
The only major currency not to see such a significant rally against the US dollar was the UK pound. The currency faced a tough session mainly because of rating company Fitch Ratings, which warned during the trading session that the UK's fiscal challenges are significant. This put some fear into investors.
By the Numbers
According to the numbers during the currency trading session on Tuesday, the currencies ended as follows. By late afternoon trading on Tuesday, the euro moved from US 41.1917 as of late Monday to US $1.1952 for the day. The euro moved from Y 109.04 to Y 109.22. The US dollar moved from Y 91.44 to Y 91.49. The US dollar moved from CHF 1.1634 to CHF 1.1530. The UK pound moved from US $1.4464 to US $1.4425 for the day. The ICE Dollar Index positioned the US dollar at 88.093 which is down from the 88.500 it was at on Monday's close of business in the currency markets.