Debt Concerns Plague Euro

Posted July 24, 2011

US dollar up most of the week. Traders worry about Portugal and other EU countries and their debts.



Monday, July 4th

During the Monday currency trading session, the euro lost most of the gains against the US dollar from the previous trading session. This came after Standards & Poor's Ratings Services warned about a potential rollover of Greek debt would cause and likely be considered a default by the country. This lead to the currency trading at US $1.4500 in the afternoon session. It ended the Friday trading session at US $1.4508. The US dollar index moved the US dollar to 74.277 which is a move from the 74.364 the currency was at on Friday. The US dollar moved to Y 80.80 which is a slight change from the Y 80.84 it was at during Friday's trading session.

Tuesday, July 5th

The Tuesday trading session lead to extended gains against the euro by the US dollar. That came after Moody's Investors Services cut its credit rating for Portugal. This moved it to below investment grade. The reason for the move was the country's continued sovereign debt concerns. During the trading day, the US dollar index moved to 74.661 for the day, an increase of 0.06 percent from the Monday session. The euro moved to fall to US $1.4419. The US dollar moved to Y 81.10 against the Japanese currency. The UK pound moved to trade at US $1.6064 for the day, which was lower by 0.1 percent.

Wednesday, July 6th

The US dollar again moved to advance on the euro during the Wednesday trading session. Investors were looking for safety as the European peripheral countries continued to struggle with sovereign debt concerns, and the drop in rating of Portugal. The Chinese central bank also increased a key lending rate during the session. The US dollar index moved to trade at 75.088. The euro fell and traded at US $1.4303 for the day. Against the yen, the euro moved to fall by 1.1 percent for the day. It also fell by 1 percent against the Swiss franc.

Thursday, July 7th

A day of positive movement for the euro occurred on Thursday. This came as traders throughout the market breathed in a sigh of relief when the European Central Bank's president seemed to be supportive of the sovereign debt problems. Jean Claude Trichet stated that he would still be willing to accept junk rated debt from Portugual as collateral for banks borrowing from the European Central Bank. The euro moved to US $1.4353 for the day. The US dollar index moved to trade at 74.938 for the day as well. Also important during the day was the move by the ECB to raise the key lending rate to 1.5 percent. The US dollar moved to Y 81.23 for the day.

Friday, July 8th

During another day of mixed information, the US dollar turned up against the euro. Then, it moved down when jobs data was released. One of the factors scaring investors was in fact Italy's move to turn bond yields up sharply. This made some traders believe that there could be a concern with Italy's debt. The US dollar index moved to 75.175 during the day after the jobs data release. The euro moved to US $1.4247 for the day by the end of the North American trading session. Against the Japanese yen, the US dollar moved to Y80.65 for the day. Against the UK pound, the US dollar moved to US $1.6037. And, against the Australian dollar, the currency moved to US $1.0748 for the day.