Posted December 19, 2011
The currency market focused primarily on the euro zone financial crisis. Unemployment's lack of improvement in the US, but improving economic conditions in the US and in some areas of Europe also played a role. The US dollar managed to improve significantly throughout the week. The euro fell below the psychological threshold of US $1.30 and barely made it back above by the end of the week.
The day of currency trading focused on the US dollar gaining against most major currencies. The euro took yet another hit, falling to the lowest level it has been at in the last two weeks. This comes directly from the new fears in the market that European leaders still are not taking the steps necessary to improve the debt crisis. Investors moved to the perceived safety of the US dollar as a precaution. The euro moved from US $1.3370 at the close of business in New York on Friday to US $ 1.3188 by the end of the session on Monday. During the day, it feel as low as US $1.3177. The US dollar index moved the currency from 78.622 on Friday to 79.533 by the end of the Monday session. The US dollar improved against the Japanese yen. It moved from Y 77.50 on Friday to Y 77.96 by the end of Monday's session.
Tuesday brought the euro to a new low against the US dollar. The euro fell as the United States stock and bond yields also took a hit. These came after an announcement from the US Federal Reserve that indicated that the US economy is expanding and it is doing so at a moderate level. However, the unemployment rate feel only slightly, which was not what investors wanted to hear. The euro moved to trade at US $1.3026 for the day. The US dollar index moved to trade at 80.303 by late in the day trading. The Us dollar moved to buy Y 77.97 by the end of the session.
On Wednesday, the euro fell even more so. It fell to under US $1.30 during the day. This is the lowest level the currency has been at since January. This came after Italy's borrowing costs soared during the session at a bond auction. This further pushed investors to worry about the health of the financial sector in the euro zone. There is nothing more than uncertainty pushing the markets, experts indicate. The euro moved to end the day at US $1.2986 for the day. The US dollar index moved the US dollar to 80.538 for the session. The US dollar purchased Y 78.08 for the day.
On Thursday, there was some pull back of the US dollar against the euro. The euro gained during the early portion of the day after positive data out of Europe and the US indicated improvements in the economies. The sale of Spanish debt went well, too. The day ended with the US dollar index at 80.292 for the day. The euro moved up to US $1.3022, still well under where it was at the start of the week.
The US fell slightly on Friday to trade lower than earlier in the week. Investors were looking and gauging the movements of the euro zone. However, there was also news of possible downgrades of credit ratings which concerned investors. The euro did manage to trade slightly higher moving above the US $1.30 threshold. It would end the week at US $ 1.3030. The US dollar index moved the currency to 80.216. The US dollar bought Y 77.82 for the day.