Euro Up Off Egypt Worries

Posted February 01, 2011

The euro took hold of the markets again. Safe haven investors look to European inflation.


US Dollar

During the Monday currency trading session, the US dollar fell against the euro.  This came as European consumer price data was released during the trading session. It helped to show that expectations for another round of anti inflationary movements from the European Central Bank were likely. 

The US dollar, the Japanese yen and the Swiss franc all posted gains during the early portion of the day's trading in Asian markets.  This was due to the investors staying with the safe haven investments available to them. The unrest in Egypt continued to be a prominent element in the markets during this early portion of the session. However, when the London markets opened, things changed, equities appeared to regain some of the falls they had faced.

The US Dollar Index showed the US dollar moving from 78.171 at the end of the trading session on Friday to 77.777 for the day on Monday in North American trading. 

The Euro

The euro moved from US $1.3608 at the end of the Friday currency trading session to US $1.3689 by the end of the North American trading session on Monday. During the currency trading session, the currency moved as high as US $1.3740 during the trading day.

The euro improved during the sessions after the European Union statistics agency reported that consumer price inflation advanced by 2.4 percent annual rate for the month of January within the euro zone. This was up from 2.2 percent recorded in the month of December. This leads to expectations within the euro zone for inflationary measures to be taken to reduce the inflation within the multi nation area.

In addition to this, there were numerous concerns within the marketplace about the conflict in Egypt, which is one of the main reasons that the currency markets during Asian market hours were more conservative, heading to the perceived safety of the yen, US dollar and the franc.  The markets turned back to other information to make currency decisions by the middle of the trading day, though, noting that the crisis in Egypt is more of a catalyst for correction within the financial markets then a concern for risk aversion.

UK Pound

During the trading day on Monday, the UK Pound moved from US $1.5866 at the end of the Friday trading session to US $1.6020 by the end of the trading day on Monday in North American trading.