Posted May 27, 2010
During the currency trading market on Wednesday, the euro continued to be plagued by debt concerns. Euro moves widely during the day’s trading.
The euro continues to be in the spotlight during the currency trading session on Wednesday. Due to the numerous debt concerns in the euro zone in total, it has become a trend that the euro will suffer throughout the day’s trading session. Sovereign debt worries continue to be the focus as investors consider whether to turn to the euro or not.
By the middle of the trading day on Wednesday, the euro was down about one percent on the day against the US dollar. It also fell by just as much against the yen and UK pound. In the hours to come, it did hold back on the fall into the early afternoon. Nevertheless, the euro investors remain very jumpy when it comes to investing in this currency.
By the Numbers
The Wednesday trading session during the afternoon hours is what many investors were focusing on for the day. The numbers showed the move that the euro made throughout the day’s trading. The euro moved from US $1.2328 as of late Tuesday to US $1.2222 on Wednesday afternoon. The euro moved from Y 110.98 to Y 110.28 during the same time period. The US dollar moved from Y 90.05 to Y 90.21. The UK pound moved from US $1.4394 as of Tuesday to US $1.4417. The US dollar moved from CHF 1.1567 to CHF 1.1592. The ICE Dollar Index pegged the US dollar as moving from 86.607 to 87.002 for the afternoon session.
US Economic News
The euro’s movement may be where all eyes are focusing, but the US dollar is also affected by the strong economic news out of the United States. During the day, investors learned that the April US durable goods orders in the country were better than expected. Further, the sale of new homes was up. Although this information was valuable in terms of estimating the country’s economic growth, risk worried investors still turned to the dollar as their safety net for the day.
Euro Zone Debt
Big on the minds of the euro zone investors is debt. Specifically, euro zone sovereign debt problems continue to hold back the markets. On Wednesday, investors were concerned with whether or not the debt problems would affect the balance sheets of the banks by making them exposed to the peripheral euro zone countries. The worry is also about this type of bad debt will hurt the economic growth of numerous countries, which would further cause difficulties in the banks. Some are worried that these banks would simply stop lending to their peers, causing a larger financial problem.
Also out during the Wednesday currency trading session was information from the British Bankers Association. This information showed that the three month US dollar LIBOR rate rose from 0.53625 percent on Tuesday to 0.53781 percent. The LIBOR or London Interbank Offered Rate, moved to the highest fixing since July of 2009.