Currency All About Economics and Greek Debt

Posted January 31, 2012

The currency trading week was dominated by concerns about the European Union's ability to manage Greek debt, the same problem the region has been dealing with for years. Also worrisome was poor economic data out of the US that indicated the country's economy grew at a slower pace that was original expected.


Monday, January 23

The currency trading session started with the euro managing to improve to the highest levels it has been at so far this year. The US dollar dropped in value against the common currency as expectations that there are measures in place to deal with the circumstances occurring in Greece are in place. Investors in European banks also seemed to be available, reducing the risk to the investors overall. For the day, the euro moved to trade at US $1.3021 by the end of the North American trading session on Monday. This is up from the US $1.2936 position it was at the close of business on Friday. The US dollar index moved from 80.148 at the close of business on Friday to 79.777 by the end of Monday. The US dollar moved from Y 76.90 on Friday to Y 77.02 by the close of business on Monday.

Tuesday, January 24

On Tuesday, the euro pared its losses but remained close to the psychological point of US $1.30. Investors were watching and waiting for news out of the Federal Reserve in the US, the first meeting for the year, prior to making their move. The euro did fall during the day as anticipation for a Greek deal seemed to fade throughout the day. However, investors did not believe that the needs for the need were too high and thus a better put together deal may be in the works. The euro moved to trade at US $1.3026 for the day. The US dollar index moved to trade at 79.853 at the close of business. The US dollar moved to buy Y 77.74 by the end of the day.

Wednesday, Jan 25

The Wednesday currency trading session saw the US dollar fall to the lowest point of the year after the Federal Reserve information came out. The Federal Reserve indicated during the day that it would keep key lending interest rates very low for the long term, even as long as more than a year more than what it previously stated. This did not bode well with investors who hoped to see improvements. The US dollar index moved to 79.563 by the end of the day. The euro moved to US $1.3091 as well. The US dollar bought Y 77.78 by the end of the session.

Thursday, Jan 26

The US dollar improved during the day's session. It improved from seven week lows against most major currencies. This came in after numerous economic reports out of the US provided more worry for investors. The US dollar index moved to trade at 79.416 by the end of the day. The euro traded at US $1.3107. The US dollar bought Y 77.48.

Friday, Jan 27

The currency session for the week saw the US dollar lose its ground on Friday. The euro did find investors after information provided a more clear picture of what is happening in Greece and ensured that there were investors available to help the country. Greek government debt seemed to be under control. US economic conditions, though, hurt traders as information showed the economy grew at a slower pace than predicted. The US dollar index would close the week at 78.854. The euro moved to close the week at US $1.3216.