Investors Turn to Riskier Assets

Posted June 17, 2010

During the trading session on Tuesday, currency traders turned to the euro once more. This allowed the euro to hit its highest level in two weeks.

 

Euro

The euro was the star of the currency trading session for the Tuesday session. During the day, investors continued their streak of moving towards more risky investments and turned back to the euro. The common currency was able to move to the highest level it has been at in the last two weeks. For the second day in a row, investors were less worried about euro zone debt levels and interested in the more risky investments.

During the trading session, the euro rose to US $1.2350 during the trading day. This allowed for the currency to rise by more than one percent against the US dollar during the session. The euro was able to move past the four year lows that it hit last week during. Most of the movement of the euro was spurred by global stocks, which also improved the last two days. In particular, the Down Jones Industrial Average moved head by some 200 points in New York. And, the euro advanced because of improved, healthy demand at European debt auctions.

The euro also seemed to be bolstered on the generally favorable data releases coming from the United States, which helped to signal a recovery in the works.

By the Numbers

During the trading session for the day, the euro moved from US $1.2225 as of late Monday evening to US $1.2348 by the end of the trading session on Tuesday. The euro’s ten year average is at US $1.20.

The US dollar moved from Y 91.47 to Y 91.40 during the trading session as well. The euro managed to move from  Y 111.81 on Monday to Y 112.86 by the end of trading in New York. The UK pound moved from US $1.4750 to US $1.4814 for the day. The US dollar moved from 1.1427 Swiss francs to 1.1323 Swiss francs. The ICE Dollar Index tracked the US dollar at a move from 86.637 on Monday to 85.934 at the end of Monday’s trading.

Moody’s

Although investors did not seem to pay much heed to it, Moody’s Investors Services, a country credit agency downgraded Greece to junk status late in the day on Monday. Then, it moved to do the same against Greek debt and deposit ratings at nine of Greece’s banks. Investors saw the move, and further lack of the euro’s fall as a good sign that investors were more willing to tolerate less than good news.

In other news, the euro’s strong advance may have also been spurred by debt auctions that were successful in both Belgium and Spain. The concern many investors had was that these countries, and other euro zone countries, would face problems when they tried to tap into international capital markets.

However, it is too early to tell if the euro has made it around the corner just yet. Many fear that the euro still needs more time before analysts will be convinced that the euro has improved.

 

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