Posted May 03, 2011
Long, hard week for US dollar. Focus on monetary policy.
The US dollar struggled from the start this week. It edged lower against most of its rival currencies while the Australian dollar rose. The dollar fell against the euro on Monday most significantly. This came as currency traders watched and wondered about the weakness in commodities, as well as the weakness present in the US stock market. Monday was a holiday and thus trading around the world was far lower than normal. However, the global markets are likely to remain volatile, experts say, until more information on economic factors is released. The US dollar index moved the currency from 74.126 in late in the day North American trading on Thursday (the markets were closed on Friday) to 73.992 by the end of the Monday session. The US dollar index has fallen by 2.5 percent for the month and a total of 6.4 percent for the month. The euro moved to US $1.4596 which is a slight increase from Thursday's US $1.4545. The Australian dollar moved to US $1.0776 for the day, from US $1.0725.
During the Tuesday currency trading session, the US dollar continued to tumble against rival currencies. It fell to the lowest levels it has been at since August of 2008, mostly because of concerns that the Federal Reserve will not tighten up its loose monetary policy, which would mean a lack of increase in interest rates, something currency traders are looking to see the national bank do soon. The US dollar index moved the current to 73.789 for the day by the close of business in North America. During the day, it feel as low as 73.744. Against the Japanese yen, the US dollar moved to 81.55 for the day, which is a loss of about 2.1 percent for the month. Against the euro, the US dollar moved down to US $1.4642 for the day.
On Wednesday the currency market continued to struggle with the value of the US dollar. The currency feel against ht euro as Federal Reserve Chairman Ben Bernanke released a statement showing that he does not know when the Fed will tighten up its remarkably loose monetary policy. However, he did say the Fed would continue to reinvest maturing Treasury and mortgage related holdings into the bank's portfolio. The US dollar index moved to 73.284 for the day, which is another low for the currency. Against the euro, the US dollar moved to US $1.4792. Against the Japanese yen, the US dollar moved to Y 82.05 for the day.
The Thursday currency market showed the US dollar touching its lowest levels since the middle of 2008 again, marketing the sixth day in a row for the low value. Stocks improved slightly and the currency traders were looking for a profit, moving out of the relative safety of the US dollar and looking for risks that could pay off. The US dollar index positioned the currency at 73.111 for the day, which is a 21 month low. The euro moved to trade at US $1.4881 for the day. Against the Japanese yen, the US dollar moved to Y 81.52 for the day.
Friday was more of the same for the US dollar. It fell to the lowest levels it has been at since July of 2008, but it did manage to rebound for the day after information from the US government showed improvements in US spending and incomes. The US dollar index moved the currency to 72.834 during the day, but it improved to 72.969 by the end of the day. Against the euro, the US dollar moved to trade at US $1.4826 and against the yen it slipped to Y 81.09.