Posted November 28, 2011
The week's currency events continued to focus primarily on the debt concerns plaguing Europe. Investors continue to move towards the risk of the euro only when positive information becomes evident, which this week there was little. On the flip side, the US dollar performed better as a result of worries over the European Union as well as poor economic information out of the US. The shortened week, due to the Thanksgiving holiday, created a slower volume.
The Monday currency trading session started with the US dollar starting the day at a high against many of its rivals, prior to being pared down. This came after the announcement that the US lawmaking group in charge of putting together a plan to cut down the spending and debt in the country failed. The euro moved from US $1.3510 at the end of the trading session on Friday in North America to close the day at US $1.3503, though it managed to fall as low as US $1.3429 during the session. The US dollar index moved from 78.098 at the end of the session on Friday to 78.267 by the end of the Monday session. The US dollar moved to buy Y 76.97 by the end of the day, from Y 76.96 on Friday.
The day was an event where the euro managed to fluctuate significantly between gains and losses. The International Monetary Fund provided some cause as it released new tools to help improve the liquidity and the financing of some of the member countries. This was a move meant to help improve the debt crisis in Europe. However, US growth seemed to stall out in the latest report, pushing investors to safer ground with the US currency. The US dollar index moved to trade at 78.252 by the end of the session. The euro moved to trade at US $1.3513. The US dollar bought Y 77. The day's trading was seen as a process of avoiding losses, as investors played the safe card throughout much of the day, especially after the US news.
The Wednesday trading session brought the US dollar to mostly positive territory. The day's session also brought the euro down to the lowest level it has been at in nearly six weeks. This, too, was a risk aversion method by investors who were troubled by a report out that indicated that a German bond auction performed poorly. This put more fear back into the hands of investors who remain concerned about the European Union's fragile debt crisis. For the day, the euro moved to trade at US $1.3334 which is a drop from the previous day. The US dollar index moved to 79.09 for the day. Against the yen, the US dollar bought Y 77.31 for the day.
Due to the Thanksgiving holiday in the United States, the markets were closed for the day in the US on Thursday. The Friday session started out with the US dollar rising against most of its rivals. Investors were selling off the euro in heavy numbers after a meeting of the leaders of the continent's largest economies came together. The meeting, headed by the three largest economies in Europe did not produce any near term solutions to the regions continuously worsening debt crisis. This worried investors back to the safe haven of the US dollar. The euro fell for a totally of .7 percent for the day to close at US $1.3224 by the end of the session. The US dollar index moved to trade at 79.688. The US dollar moved to buy Y 77.405 by the end of the day as well.