Posted July 30, 2010
The US dollar improved against the euro, though it fell against the yen on Friday. GDP data worries hold back increases.
US Economic Data
During the currency trading session on Friday, the US dollar managed to improve against the euro for the first time in several days. However, it was unable to improve against the yen. This comes as a report on the US gross domestic product, or GDP, was released. The report put more worries into the investors about the potential rebound for the US economy.
The information out of the US on Friday about the country’s economy was rather mixed. However, even with some good information, investors were not convinced that a recovery is improving steadily. The US GDP numbers show that the country grew 2.4 percent at an annual rate in the second quarter of 2010. However, investors had hoped for 2.5 percent. This hampered the dollar’s improvements.
On the flip side, the Institute for Supply Management Chicago also offered a report on Friday. This report showed that the Chicago Business Barometer improved to 62.3 in the month of July, up from 59.1 in June. Also, a University of Michigan and Reuters report showed that a confidence index for the month of July was expected to be at 67.8 percent.
The US economic data was enough to push investors away from the euro and towards the dollar, because of its perceived strength. However, investors who were looking for even more safety turned to the Japanese yen to get it. Currently, the yen is viewed as a far safer investment over most other currencies. The yen managed to move the US dollar back to its lowest level since November of 2009. At that point, the US dollar was at Y 85.95. The US dollar has lost 7.1 percent against the yen during 2010 and it has lost about 2.3 percent against the yen throughout July.
During the trading session on Friday, the UK pound moved to five month highs against the US dollar. This came after investors were buying against the euro as the market’s conditions remained so unsettled for the day. Further, it is important to note that the summer time drop in volume causes an exaggeration of movements in the market. This kept the UK pound in improved territory throughout the New York trading session.
By The Numbers
By the end of the New York trading session on Friday, the euro moved from US $1.3090 as of late Thursday to US $1.3053. The euro fell but about 9.2 percent against the US dollar in the 2010 year thus far. However, in the month of July, the euro has managed to cut many of those losses. It has rebounded by 6.7 percent against the US dollar for the month of July.
The euro moved from Y 113.77 to Y 112.76. The US dollar moved from Y 86.96 to Y 86.41. The US dollar moved from CHF 1.0414 to CHF 1.0404. The UK pound moved from US $1.5617 to US $1.5695. The ICE Dollar Index moved the US dollar from 81.599 to 81.523.