Euro Moves to 2 Month Highs

Posted July 10, 2010

During the currency trading session on Thursday, the euro improved to two month highs against the US dollar. Global data helps spur growth.


Investors View Positive Data

During the Thursday currency trading session, the euro managed to move to a two month high against the US dollar. That occurred after reports of better than expected economic data were provided from the US. This helped to encourage investors who were concerned with the global growth prospects.

Out of the United States was positive US jobs data. This helped to break the worry of investors who saw the latest string of disappointing news previously released out of the United States as an indicator of a slow down in economic growth. However, this new jobs data refutes such worries. Further helping the euro during the day was the less concern over the euro zone’s debt worries. More details came out on Thursday about the stress tests that several euro zone banks will take on, helping to ease the minds of investors.

Investors are watching and waiting to learn what will happen when these banks are tested. Some believe that if these banks are able to overcome these tests, it could help to spur growth of the euro to US $1.30 or higher. Trouble with these tests, though, could mean that the euro will sink back to four year lows. The European Central Bank did leave key interest rates unchanged during a meeting on Thursday. That did not seem to play a role in the currency trading. 

By The Numbers

During the currency trading session on Thursday, the euro managed to move from a Wednesday of US $1.2648 to US $1.2703. During the trading day, the euro managed to climb as high as US 1.2713. That is the highest level it has been at since May 12th. The euro moved from Y 110.93 to Y 112.27. The US dollar moved from Y 87.70 on Wednesday to Y 88.38. The UK pound moved from US $1.5201 to US $1.5155. The US dollar moved from CHF 1.0517 to CHF 1.0490. The ICE Dollar Index moved the US dollar from 83.868 to 83.699 for the day.

US Data

On Thursday, economic data about the US jobs report was released. The number of US workers who filed for unemployment benefits fell week over week, more than what was expected by most analysts. The jobless benefits declined by 21,000, said the US Labor Department, down to 454,000 for the week that ended July 3rd. Most analysts believed that the number would fall but by only as much as 12,000. 

Australian Dollar

This news helped to impress investors who had been worried about global growth. Because of the positive data, those currencies tied to global growth improved during the currency trading session. This included the Australian dollar, which managed to gain 1.5 percent against the US dollar during the trading session. Also helping the Australian dollar was reports about Australian jobs that showed improvements on that front as well. Australian jobs data was also stronger than what most economists expected.