Posted August 13, 2010
The US dollar improves in trading Thursday. Investors slow down risk by buying safer bets.
During the currency trading session on Thursday, the US dollar improved for the day against many of its competitors. This was due to investors turning to the safety of the US dollar as compared to the euro. Many investors are concerned about a global economic slowdown that seems to be taking hold. That held back the euro for the day and made the US dollar look like a safer place to invest.
During the trading session on Thursday, the US dollar rose against the yen. This is the first time in a while that the yen has fallen against the US dollar. It occurred after the Japanese officials stated that there was concern about the yen's recent strength. Most of the information was rhetoric.
During the trading session, the US dollar moved up for the second day significantly. On Wednesday, the US dollar rose significantly against most of its competitors, except for the yen, and ended at a largest single day improvement since December of 2008 in the ICE Dollar Index. That index tracks the value of the US dollar as compared to a trade weighted basket of currencies.
Also hurting the euro was a jobless claim that came out on Thursday. The report indicated that US weekly jobless claims climbed to the highest level seen in six months. That was unexpected news.
Economy Holds Back
The main factor affecting any movements by traders during the currency session occurred because of the economic conditions worldwide. Several reports of poor data streaming from the US, Asia and from Europe have all had a negative aspect for investors who turned away from risk sensitive assets and growth sensitive assets in favor of the US dollar.
Data released showed that in 16 countries that use the euro, industrial production has fallen unexpectedly for the month of June. That report follows others from Germany and from France indicated that there is a decline in output in both of those countries as well. This information comes from the European Union's Eurostat offices.
Also hurting the euro was the fact that reports indicate that the European Central Bank purchased short dated Irish government bonds during the trading session on Wednesday and on early on Thursday. This move was likely to help calm the volatility in the markets over the concern that some of the Irish banks may not be creditworthy.
By The Numbers
During the trading session on Thursday, the following results occurred by the end of the trading day in New York. The euro moved from US $1.2882 as of late Wednesday to US $1.2833. The euro moved from Y 109.99 to Y 110.23. The US dollar moved from Y 85.37 to Y 85.90, a first climb for the dollar against the yen in several sessions. The US dollar moved from CHF 1.0576 to CHF 1.0499. The UK pound moved from US $1.5683 to US $1.5581. The ICE Dollar Index moved the US dollar from 82.276 to 82.569.