Posted June 19, 2010
The euro fell during the trading session on Friday. However, it did manage to gain big for the week.
The euro's slip during the currency trading session on Friday was not enough to minimize the week's gains. Over the week, the euro managed its biggest weekly rise since May of 2009. The euro dropped to its lowest level last week, to points not seen since March of 2006. However, the euro was able to bounce back in the week since, by more than four percent for the day. This was even though there was bad news trickling in. Investors still seemed poised to keep the riskier asset at hand.
New speculative bets, or shorts, against the common currency fell by 44 percent this week, as compared to the week prior. This has lead to positive investor sentiment that has lead to short term investors having to unwind their bets against the euro. This helped to push the euro higher against the US dollar.
There was plenty of bad news to go around during the Friday trading session, too. This includes the downgrading of Spain's government debt. However, the fact that Spain pulled off a successful auction during the Thursday trading session helped the euro to hold its ground. Investors seemed also bolstered that there was information out of the European Union that the development of results of bank stress tests would be released by the end of July helped to provide investors with more confidence in the markets. The debt crisis has long held the euro back, but these tests could be voluntary in some could be voluntary in some countries.
By the Numbers
During the currency trading session on Friday, the euro managed to move from US $1.2388 as of Thursday evening in New York to US $1.2370 for the day. The euro's movements over the last two week period moves the euro from a low level of US $1.1876, a level that was previously not seen since March of 2006.
The euro moved from Y 112.72 to Y 112.26. The US dollar moved from Y 91.00 to Y 90.74. The UK pound moved from US $1.4820 to US $1.4812 for the day. The US dollar moved from CHF 1.119 to CHF 1.1093. The ICE Dollar Index moved the US dollar from 85.657 to 85.633 for the day.
The US dollar's fall against Japanese currency is the lowest it has fallen in three weeks. This is due in part to some negative economic data that was released this previous week. Investors took a small turn away from the US dollar to the Japanese yen.
Notable on Friday was that investors were still turning to the Swiss franc. It managed to climb to a new high against the euro. Many investors have anticipated that this would occur. Many investors believed that the franc would improve especially as the Swiss National Bank has moved away from its policy of seeking to stem the improvements to the Swiss currency.