Posted July 28, 2010
The euro was unable to hold on to 11 week gains. All eyes focus on economic growth during the trading session.
The euro fell back during the trading day on Tuesday. This caused the common currency to fall from its 11 week highs against the US dollar. The euro was unable to hold the attention of investors looking for safety as more disappointing data is released out of the United States, putting more of a worry on investor’s backs. Many believe that a global recovery is not possible without the US economy improving.
The euro still maintained its position near US $1.30 getting as high as nearly US $1.3050 during the day. Investors were more concerned with the US economy during the session then with the sovereign debt concerns in Europe.
The euro did manage a gain for the day. It was partially fueled by the better than expected data on consumer sentiment in Germany. This moved the US dollar lower while helping the euro to grow during the early portion of the trading session for the day.
US Economic Data
The economic data released on Tuesday played a significant role in the currency trading day, making many investors concerned that the US could be heading for a slowdown. US consumer sentiment data was released and showed weaker than expected numbers. The report worried investors who are concerned that a weak labor sector in the US could be holding back consumer spending.
Consumer confidence levels dropped in July. This data only slightly missed the expectations of most economists, though. Nevertheless, the data was the lowest since February.
Australian Dollar and Canadian Dollars
As two currencies that play heavily on economic data, both the Australian dollar and the Canadian dollar initially improved for the day as the euro improved. However, when disappointing data was released out of the US, both currencies fell. However, the Australian dollar moved to the highest level since the month of May. The surge in value was due in part to the gains seen in the US stock market as well, all prior to the release of the economic data.
Also notable during the currency trading session on Tuesday was the UK pound’s movement. The UK pound stopped the trend it has had of losing to the higher yielding currencies such as the euro, Australian dollar and New Zealand dollar and managed to gain significantly against the US dollar during the trading day.
By The Numbers
By the end of the Tuesday trading session, the euro had moved from US $1.2997 to US $1.3006. However, this was off the 11 week high that the euro had had, which was at US $1.3047. The euro moved from Y 112.91 to Y 114.37 for the day as well. The US dollar moved from Y 86.89 to Y 87.97 for the day. The US dollar moved from CHF 1.0600 to CHF 1.0485. The UK pound moved from US $1.5485 to US $1.5485 for the day. The ICE Dollar Index moved the US dollar from 82.022 to 82.138 for the day.