Euro Bounces Around

Posted May 21, 2010

The euro and US dollar match is long from over. During Thursday’s trading session, the euro improved and fell throughout the day, depending on the moves of investors.



The current currency market is not one of stability, which could be easily seen by watching the euro move throughout the day. Investors are using virtually all types of news, good and bad, as well as speculation, to fuel their decisions. This jittery market has left the euro hanging on.

The euro zone crisis, in regards to debt, is not the only concern for the euro during the trading session. In fact, commodity based currencies are struggling. Date out of the US on Thursday also seemed to not be as good as what most investors were hoping for. This helped to move the markets throughout the day.

By the Numbers

During the up and downs of the currency market on Thursday, numerous currencies reacted to information and speculation. The euro fell against the yen during the trading sessions, to a 9.5 year low. That low, under Y 110, was not the stop, though. The euro was able to rebound as US stock prices seemed to come up from their losses on the day as well. The euro fell prior to this due to the nearly three percent drop in US stocks prior. At that point, the euro fell under US $1.23.

The euro moved from US 41.2391 on Wednesday evening to US $1.2366 by noon in New York. The euro moved from Y 113.41 Wednesday to Y 111.30. The US dollar moved from Y 91.54 to Y 90.03 by midday trading. The US dollar moved from CHF 1.1517 to CHF 1.1512. The UK pound moved from US $1.4415 to US $1.4341 during the trading session. The ICE Dollar Index moved the US dollar from 86.276 to 86.460.

Risk Rules

During the currency trading session on Thursday, the markets played by risk. The emerging market currency of the Brazilian real, for example, is much riskier than the US dollar. Against the real, the US dollar moved up more than three percent by late morning trading.

The Canadian dollar and the Australian dollar were both victim to this risk during the currency trading session as well. The US dollar improved by three percent against the US dollar in early morning trading. The Canadian dollar fell by as much as two percent in the same period.

US Job Data

Also hurting the markets during the Thursday session was the weak data information released by the US. The report provided a disappointing reading on the US weekly jobless claims, which showed an uptick in the number of people filing for jobless claims. Also, there was a drop in the leading US economic indicators reported during the morning session. This all factors into a potentially slower recovery for the US economy which could cause numerous currencies to struggle.

With the tense climate in the markets on Thursday, it is likely that investors will continue pulling away from these more risky currencies and will move towards the US dollar and to the yen, as safer havens during this time.