Posted November 14, 2011
The euro falls through most of week. Italian financial concerns seem controllable by week's end.
The Monday trading session brought with it the US dollar losing many of its gains from the previous week. The Monday session was volatile, with worries about Italy, the European Union's new big concern, worried investors. Italy's ability to fund its needs concerned investors while Greece's situation seemed to provide some relief. There, political parties were moving towards a solution that seemed to be encouraging news that the country would be pushing through with the plan to use the international bailout funds put into place. The euro moved to trade at US $1.3771 by the end of the North American trading session which is an improvement from US $ 1.3770 it was at on Friday. The US dollar index moved the currency from 76.984 on Friday to 77.974 by the end of the Monday session. The US dollar moved to trade at Y 78.07 against the Japanese currency, a change from Y 78.17 on Friday.
The Tuesday session saw the US dollar fall against the euro after reports indicated that the Italian Prime Minister was resigning his seat after the 2012 budget is approved. Investors are concerned about what the signaling of a loss of confidence in the prime minister could mean for the country's growing financial problems. The US dollar index moved to 76.620 by the end of the session. The euro moved to trade at US $1.3785 by the end of the day's session. The US dollar moved to trade at Y 77.71 by the end of the session. This could lead to another intervention by the Japanese authorities as well.
The Wednesday trading session brought the euro to the ground, with one of the largest falls against the US dollar for the year. This came after Italian government bond yields surged for the day. This brought fears into the market that the euro zone's third largest economy was struggling and may need a bailout. Investors who did not want to take on the risk moved to the perceived safety of the US dollar. This pushed the euro to US $1.3553 for the day, giving it a more than two percent drop for the day, which marks the fourth time this year that the currency has fallen by that much in a single session. The US dollar index moved to trade at 77.885 for the day. The US dollar moved to trade at Y 77.87 for the day.
The Thursday session saw the US dollar coming off the highs from the previous day. This came after the euro found some stability. Investors hoped that the Italian lawmakers would move quickly to put in place economic reforms that would keep it from hitting rock bottom. The euro moved to trade at US 41.3604 for the day. The US dollar index moved to trade at 77.660 for the day, while the US dollar moved to trade at Y 77.67.
The Friday session brought the US dollar falling against most of its rivals. The euro managed to improve again for the day. The Italian Senate moved to approve a new budget law that would help to ensure that the current Prime Minister of the country, who is believed to have lost the confidence of the people, to resign as he promised. The bill provides austerity measures is likely to pass the lower chamber over the weekend. The euro moved to end the week at US 1.3745, though it was still down .04 percent for the week. The US dollar index moved to trade at 76.947. The US dollar moved to trade at Y 77.17 for the day.