Posted October 20, 2010
US dollar down for day, UK pound falls against US dollar and euro.
During the trading session on Monday, the US dollar fell against the euro due to the cloudy picture on the US economy. The US dollar fell against the euro and pared gains against the UK dollar and the Canadian dollars. This economic input made the debate about whether and how the Federal Reserve will act more active.
During the trading day, many of the gains from the US dollar came from investors who reduced bets against the US dollar and took profit positions on it. That came after the US dollar dollar’s long run lower against the European currency, the Canadian dollar and the Australian dollar. The ICE Dollar Index moved the US dollar from 77.038 as of Friday to 76.922 by the end of trading on Monday. It was able to rise as high as 77.645 during intraday trading. The Index hit its lowest point since December last week.
The UK pound’s movement during the day stems from the concerns many investors have about the Bank of England easing its monetary policy and the European Central Bank not tightening its policies too soon. Those positions helped to support the US dollar during the day. The UK pound fell by 0.3 percent to US $1.5942 during the day.
During the trading day, the euro moved from US $1.394 as of Friday evening in North American trading to US $1.3964. It had fallen as low as US $1.3829 during the day’s trading session. The euro’s improvements during the day was due to the US industrial production reports that showed an unexpected slip in the month of September. This pushed investors towards the likelihood that the Fed’s Open Market Committee is likely to boost the economy by allowing monetary policy to ease through a bond buying program.
During the Monday trading session, the Japanese yen once again improved against the US dollar. The US dollar fell from Y 81.49 to Y 81.23 during the day against the yen. During the previous week’s movements, the yen fell to its lowest level in 15 years, to below Y 81.
The Australian dollar was not able to push higher during the day, as it started to do last week, towards parity with the US dollar. It moved from US 98.83 as of late on Friday to 99.43 as of the end of trading on Monday.