Strong European Data Causes Dollar To Fall

Posted January 19, 2011

US dollar down. Euro up more than one percent

 

During the currency session on Tuesday, the US dollar lost a great deal against many of its major rivals. This was due to a number of positive reports out of Europe. In addition, the euro itself gained more than one percent during the day, all stemming from the improvements in the euro zone.

US Dollar

The US dollar lost ground during the session as investors turned towards the more risky currencies of the euro and its other competitors.

The US Dollar Index moved the US dollar from 79.371 at the end of the trading session on Monday in Europe to 78.972 by the end of the session on Tuesday in North American trading. The stock markets were closed on Monday in the United States in observance of a national holiday.

Euro

The Euro remained positive throughout the session on Tuesday. This came in after reports indicated that the German investor confidence was high. Investors seemed less concerned about sovereign debt concerns in the euro zone as well, pushing the euro ahead. The euro moved from US $1.3292 at the end of trading on Monday in Europe to US $1.3388 by the end of the trading session on Tuesday in North American trading.  The currency reached its highest level in the last month against the US dollar when it hit US $1.3466 during the trading session. 

Reports flooded the markets during the session bringing life to the market. Reports indicated that Moscow was considering a lift on the ban on purchasing Spanish sovereign debts by the two wealth funds in the country. And, Spain sold 4.5 billion euros of treasury bills and 1.4 billion euros of 18 month bills in what was considered a positive session. And, Portuguese bond yields were improving as well.

UK Pound

The UK pound was up against the US dollar during the Tuesday session as well. This is the first time in almost two months that the currency has moved up against the US dollar to above US $1.60. The currency moved up 0.4 percent and ended the session at US $1.5965.

Yen

The Japanese yen moved up against the US dollar during the Tuesday session. The US dollar pared many of its losses during the day and ended up moving from Y 82.72 as of the end of currency trading in Europe on Monday to Y 82.61 at the end of the Tuesday session. 

 
 

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