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US Dollar Up as European Union Decision Comes In

Added: December 17, 2010

The US dollar is up against euro and yen for week. Dollar trades up as European Union decision lacks.

US Dollar

During the Friday currency trading session, the US dollar rose again as the European Union members came back with a decision investors are not happy with. The US dollar moved to its highest level for the month against most major currencies. The US dollar index moved the Us dollar from 80.167 as of the end of the trading session on Thursday to 80.402 by the end of the trading day on Friday, in North American trading. The US dollar index has improved by .4 percent for the week after coming back from lows in early November.

Euro

The European leaders came to an agreement about the movements that the euro zone will take which were at the lowest end of what currency traders expected. During the early portion of the day, the euro stabilized. This came as a report indicated that German business sentiment reached a record high level in the country. This helped to show the strength of the Germany economy, which is the largest European economy.

A two day meeting concluded on Friday in which European Union leaders came together to discuss the options for ensuring euro zone financial health. The group decided on a plan that would help by providing a permanent crisis fund that would provide aid to the euro zone countries through 2013. The move was not unexpected. Also hurting the euro was the decision by Moody’s Investor Services to cut into Ireland’s credit rating, which continued to weigh on currency traders already worried about the shaky euro zone countries.

The euro moved from US $1.3132 as of the end the Thursday trading to US $1.3173 by the end of the Friday trading session. For the week, the euro has lost about .4 percent for the week.

UK Pound

The UK pound moved from US $1.5611 as of the end of the Thursday session to US $1.5491 by the end of the trading session on Friday in North American trading.

Yen

Against the Japanese yen, the US dollar fell. This came as the US Treasury department yields fell further. The US dollar and the Japanese yen interaction generally changes with interest rate movements and changes. The US dollar moved from Y 84.17 as of the end of North American trading on Thursday to Y 83.90 by the end of the Friday session.

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Allied Irish Banks Will Hurt Euro

Posted by Abdul Hahn at Dec 31, 2010 03:05 AM

Allied Irish Banks is probably going to be nationalized and that’s going to weigh down the euro. The talk is the Irish government may increase its holdings to as much as 91.5 percent of the bank. A takeover like this will dilute the shareholders and the shareholders weren’t even asked for their consent for this bank takeover. This makes the 4th Irish bank to be nationalized. The problem is that the cash injection will only salvage the bank but won’t give the bank the capital reserves it needs to get and remain healthy. And how will the government settle with the shareholders? All of this is going to put yet more pressure on the euro. There is going to be a lot more risk aversion in the market.