Euro Moves To Two Month High

Posted July 17, 2010

During the trading session on Thursday, the euro improved against the US dollar. It moved to two month highs.


Euro Improvement

During the currency trading session on Thursday, the euro managed to improve significantly against the US dollar. The euro rose as investors lessoned concerns about the euro zone sovereign debt worries that have plagued the region for months. Further, the euro improved as many investors turned away from the US dollar and the poor economic news out of the country. Investors worry that the US economy may be stalling.

During the trading session, the euro improved above US $1.29, which moved it to two month highs against the US dollar. It is closer to the US $1.30 psychological level that investors hope to see it move towards in the coming months. In early June, the euro hit is lowest market in four years, at US $1.1876 and has steadily improved since that time.

Helping the euro was the successful debt raises which occurred in Portugal, Spain and Greece, which  helped to ease investor concerns. The stress tests which the European Central Bank plans to conduct are likely to have favorable results, most experts believe.

The US dollar was not helped this week when news from the Federal Reserve showed that the country’s economy was stalling out. The second half of the year is off to a very weak start for the country.

By The Numbers

By the end of the trading session on Thursday, the euro managed to move from US $1.2735 as of late Wednesday to US $1.2900. The euro did manage to get as high as US $1.2918 during the session but was unable to hold on to those gains. The euro moved from Y 112.29 to Y 112.81 during the day. The US dollar moved from Y 88.19 to Y 87.46. The US dollar moved from CHF 1.0540 to CHF 1.0439. The UK pound moved from US $1.5261 to US $1.5412 during the day. The ICE Dollar Index moved the US dollar from 83.385 as of late Wednesday to 82.555 at the end of the trading day. During the day, the ICE Dollar Index hit its lowest level since May.

US Data

One of the main role players during the currency trading session for the day was the economic factors out of the US. Jobless claims in the US were lower than expected. There is evidence that the manufacturing industry is expanding, but it is doing so at a slower pace. Investors are also less than happy that the Federal Reserve is likely to not raise key lending interest rates until the following year, which keeps pressure on the US dollar. 

Also, US industries boosted their production in the month of June, according to reports released. However, this boost was minimal. This too is a sign that the economic recovery in the United States could be cooling off significantly. The Fed’s less than optimistic viewpoint is likely to hurt the US dollar during trading sessions. Investors turned to the euro due to its likely continued improvement.