Posted November 12, 2010
US dollar gains as euro zone troubles weigh in. G20 meeting and debt focus.
During the Thursday currency trading session, the US dollar jumped in value against several of its competitors. This has created the strongest week for the US dollar in three months, if Friday’s session remains positive. The gains were due in part to the euro’s continued fall in value that has stemmed from concerns about Ireland’s fiscal situation as well as concerns about other euro zone debts.
The US Dollar Index moved the US dollar from 77.621 as of late in the day Wednesday to 78.164 by the end of trading in North American trading on Thursday. It rose during the day to as high as 78.287, which is the highest level the US dollar has rose from since October 19th. For the week thus far, the US dollar has gained 2.1 percent on the index, which is more than it has gained in full weeks since August.
Much of the trading for the Thursday session was lower than normal due to the observance of Veteran’s Day in the United States, which closed the US Treasury for the session. There was less activity in Europe as well.
The euro moved from US $1.3787 where it was positioned at the end of the Wednesday trading session to US $1.3660 by the end of trading on Thursday. Investors continue to monitor the current conditions throughout the euro zone with several countries on the verge of default due to ever increasing debt. The euro fell as low as US $1.3620 during the day’s trading session, which is the lowest it has been at since early October. The euro is down 2.7 percent in the last four trading sessions.
Of particular concern is the Irish government’s bond yields. These continued to climb during the Thursday session. They hit a ten year high to 8.9 percent. This occurred as investors got rid of the bonds for countries like this. The concerns center on Irish, Portuguese and Spanish debt.
The US dollar also gained against the yen during the Thursday session. The US dollar moved from Y 82.23 as of late Wednesday trading in North America to Y 82.45 by the end of trading on Thursday.
Against the UK pound, the US dollar also improved. The UK pound moved from US $1.6133 to US 1.6111 for the day. The UK pound dropped 0.9 percent.