Posted June 15, 2010
During the currency trading session on Monday, the euro moved ahead of the US dollar during the session. Economic recovery was on the minds of investors today.
Investors Take On Risk
Perhaps the most striking of events during the currency trading session on Monday was the fact that the investors decided that it was a good opportunity to take on risk. The US dollar fell during the day mainly because investors were more willing to move towards the more risky euro during the session. This was fueled by the global economic recovery that seems to be in place currently.
What made the moves striking and interesting is that there was no really meaningful economic data released from the US during the session, which in the past has helped to spur on the growth of the euro and other commodity based currencies.
By the Numbers
The Euro moved from US $1.2106 as of late Friday trading in New York to US $1.2223 by the close of business in New York on Monday. The US dollar fell from Y 91.61 yen to 91.56 yen during the day as well.
It was just last week that the euro fell to its lowest point in four years to US $1.1877. That fall was due to the worries within the market that the euro zone was plagued with debt problems that would be difficult for these countries to overcome.
The UK pound moved from $ 1.4550 as of late Friday to US $1.4742 as of Monday evening. The US dollar moved from 1.1497 Swiss francs to 1.1418 Swiss francs for the day as well.
Also helping to move the euro forward for the day was the improving stock markets throughout the day. As the stocks moved up, the risk appetite of investors seemed to improve. They took on more risky investments such as the euro. Some experts believe that the calm in the financial markets that helped to keep investors calm last week have spilled over into this week.
The European Union did provide some information in a report issued today that seemed to help the improvement of the attitude of the economic climate on a global level. The report issued showed that euro zone industrial production numbers grew in the month of April by 0.8 percent. When compared to the same time period in 2009, the numbers were up by as much as 9.5 percent. This shows that there is a recovery happening in the export sensitive area of the industrial sector. This has affected the euro zone countries financially in the last year.
Out of Britain came news that the country would be cutting its 2011 economic growth forecast from 3.25 percent down to just 2.6 percent. The country also cut its public borrowing estimate for the day. This helped to offer come easing of concerns that the new government's fiscal policies would be difficult for the country's economic recovery, not to mention the global recovery. The world currency markets seemed bolstered by the fresh movements.