Posted December 12, 2011
During the week's trading, all eyes were on the continued change and concern in the European Union. Investors continue to look for signs that the European Union is improving upon its debt crisis, and by the end of the week, an improved mood did boost the euro. The US dollar continues to build value as a risk aversion tool.
The Monday trading session saw the euro turn lower after continued worries about European ratings across the area. A report out by the afternoon session indicated that credit rating agency Standards and poor was warning AAA members in the European Union that their credit rating may be slashed in the weeks or months ahead. The euro did move higher earlier in the day's session after German Chancellor Angela Merkel and the French President, Nicolas Sarkozy provided information about a planned overhaul of European Union treaties. This would place tighter fiscal rules in place for member nations. The euro moved from US $1.3409 at the end of the trading session on Friday in North American to US $1.3386 by the end of the Monday session. The US dollar index moved from 78.609 on Friday to 78.654 by the end of Monday session. The US dollar moved to buy Y 78.03 on Friday and Y 77.80 on Monday.
The Tuesday session saw the US dollar fall lower for the day as the euro seemed to improve. Investors pushed the risks during the session in the positive vibes coming from the summit of European Leaders planned for later in the week. This pushed the euro to a slight lift during the afternoon trading sessions, especially after one report indicated that the European Union could be planning to double the size of the bailout plan in place. The euro moved to trade at US $1.3416 by the end of the day. The US dollar index moved to 78.498 for the day. The US dollar moved to by 77.75 yen by the end of the session.
Wednesday saw the push back of the euro as the US dollar improved due to risk aversion. Investors did not like the report out from Germany rejecting the latest proposal to improve the bail out of the European Union's members to a larger than previously agreed amount. This also pushed investors to safety with the increasing risk that there could be further financial troubles on the horizon. The euro moved to trade at US 41.3405 by the end of the session. The US dollar index moved to 78.470. The US dollar moved to buy Y 77.68 for the day, slightly lower.
On Thursday, the euro took another hit. This came after the European Central Bank noted that it would not be expanding its bond purchase plan that many hoped for to help distressed European countries. This pushed risk to the forefront once again. It sent the euro to trade at US $1.3347 for the day. This came after the central bank cut its key lending rate to one percent, which was a quarter percentage point. The US dollar index moved to 78.789 for the day. Against the US dollar, the Japanese yen moved to trade at Y 77.67 for the day.
On Friday, things changed as the US dollar fell. This came after the European leaders seemed to come together on improving fiscal concerns. Fiscal ties and other measures could help to stem the unions continued debt problems. The US dollar index moved to 78.622. The euro moved to trade at US $1.3370. The US dollar moved to buy 77.50.