Currency Market Focuses on Fear

Posted August 17, 2011

Risky assets pushed aside. US dollar's movements slide up and down.



Monday, August 8th, 2011

During the Monday trading session, the US dollar rose against the euro. Investors turned to the perceived safety of the US dollar after more concerns about the eurozone's sovereign debt concerns came into focus. New information created a situation in which traders worried that the debt problems could become a solvency crisis for the region. However, the US dollar remained lower against the Swiss franc and the Japanese yen, due to the cut in the US credit rating. The downgrade was unprecedented and the markets acted as such. The US dollar index moved the currency from 74.592 at the end of North American trading on Friday to 74.6890. The US dollar moved from Y 78.42 to Y 77.61. It fell to a new all time low against the Swiss franc, the safe haven. It moved to trade down 0.9 percent to 75.47 centimes. Against the euro, the US dollar moved from US $1.4269 to US $1.4185 by the end of the session.

Tuesday, August 9th, 2011

The following day led to losses for the US dollar against those safe haven currencies again. This came after the Federal Reserve made a statement which indicated its believe that the US economy is recovering slower than is to be expected. This pushed investors to the franc which moved to a new high against the American currency. The Fed also said that it would hold interest rates at the low levels they are currently add and stated it would like continue to do so through the middle of 2013, slashing investor hopes. The US Dollar Index moved the currency to 74.307 during the day. The euro moved to US $1.4274 for the ay while the US dollar moved to Y 76.86. The dollar fell by five percent against the Swiss franc, to 71.58 centimes by the end of the session.

Wednesday, August 10, 2011

With France irking investors, the US dollar took to a rebound during the day's trading. The US dollar improved against the euro as the sovereign debt concerns seemed to engulf France during the trading day. The US dollar index moved to 74.688 for the day. And, Wall Street posted steep losses that wiped out the rally occurring on Tuesday. The euro moved to trade at US $1.4193 for the day. The US dollar moved to trade at 72.80 centimes, up for the day. It moved to trade at Y 76.85 as well.

Thursday, August 11th, 2011

The Thursday trading session saw the US dollar fall again against the euro. The upward movement of the stock market allowed for the belief that investors were willing and able to take on more risk. The euro moved to trade at US $1.4226 against the US dollar during the day. Also affecting the session were comments made by the Swiss regarding the steps taken to limit the strength of the currency. The US Dollar Index moved the currency to 74.618. The US dollar moved to Y 76.79 for the day as well.  The US dollar moved to 76.30 centimes against the Swiss franc.

Friday, August 12, 2011

The US dollar continues its fall on Friday, making its biggest move against the Swiss franc. It dropped lower against most of its competitors during the day, as a report indicated that the US consumer confidence level had dropped significantly and more than expected. The euro traded at US $1.4251 for the day. The US dollar index moved it to 74.594. Against the Swiss franc, the dollar moved to 77.66, a climb of 1.9 percent.