Dollar Up On Yen, Investors Take On Risk

Posted August 19, 2010

The US dollar up against currencies. Investors focus on risk during the trading day.


During the trading session on Tuesday, the US dollar improved significantly against the yen. However, it did fall to the euro during the movements. This occurred mainly as investors turned to risk after receiving some better than expected information about of the US industrial data. 


The euro had an improved day against the US dollar as investors were once again looking to risk and the potential of profit. During the trading day, the better than expected data out of the US fueled the move, but there was also strong demand in the Spanish and the Irish government bond auctions that occurred. That demanded helped to provide some relief over concerns that these countries may have difficulty overcoming euro zone debt concerns. However, the demand for riskier assets has improved and that has meant an improvement on the euro against the US dollar. The euro managed to bounce back from the lows it hit during the trading session on Monday against the yen, at which time it fell to seven week lows.

US Economic Data

During the trading session on Tuesday, pieces of data out of the US helped to offer a glimmer of help to investors who are very concerned about a double dip recession. One good bit of news out was that the US industrial production improved in the month of July after falling slightly in the month of June. In many ways, the manufacturing industry has been an important part of the growth of the US economy. Other areas, including consumer spending, seemed to show additional signs of weakness in the economy. These industrial numbers were the first positive surprise that the data had seen in the recent history, especially since most data over the last month has been disappointing from the United States economy.

In addition, US housing start numbers were released during the day. There was an increase in the number of housing starts in the month of July. In addition to that, an index of producer prices met the economists forecasts for it, plus added a slight increase.  All of these figures pointed positively for the country's economic point. 

Yen Concerns

Although the US dollar gained against the yen, there is still concern over the value of the yen. Investors are carefully watching the movements of the US dollar to the yen. Some believe that Japanese officials may feel the need to intervene in the currency markets if the yen continues to gain strength too quickly. 

By The Numbers

During the trading session on Tuesday, the euro moved from US $1.2818 as of late Monday to US $1.2879. The euro moved from Y 109.35 to Y 110.12. the US dollar moved from Y 85.30 to Y 85.50. In addition, the US dollar moved from CHF 1.0397 to CHF 1.0440. The UK pound moved from US $1.5654 to US $1.5572. The ICE Dollar Index moved the Us dollar from 82.470 to 82.236.