The Euro Improves Against the Yen and US Dollar

Posted April 08, 2010

Euro gains on the day. Greek debt concerns lead to a bounce as does Germany’s export numbers.


In currency trading on Thursday, the euro rose in value against the US dollar and the yen. The move marks the second day in a row that the euro saw improvement, mainly due to the improvement in the opinion that Greece would not default on the country’s debt.

Greek Debt Concerns Subside

One of the strongest elements that helped to push the euro higher in trading was a statement made by European Central Bank President Jean Claude Trichet. Mr. Trichet stated that he does not except for Greece to default on its debt. He also stated that he does not believe that the country will need to turn to the European Union for financial assistance either. That was the vote of confidence that the market needed to push it in a positive direction for the euro.

However, most economists feel that the statement from Trichet is only enough for a bounce for the euro and that the underlying concern for the Greek debt will remain for some time, at least until it is settled.

By the Numbers

The euro moved from 124.75 in New York trading on Wednesday to 125.12 yen by early morning in Tokyo. At that point, it improved 0.1 percent. The euro would later move from $1.3361 to $1.3383. Against the US dollar, the yen moved from 93.38 to 93.51 during trading, to move towards a 1.2 percent gain for the entire week.


Unexpected news out of Germany also helped to encourage the euro’s positive movement. In trading on Thursday, the euro was boosted by reports that show that German exports rose in the month of February. That boosts the demand for the region’s assets. While the yen may fall back, the stock futures do show that the regional equities will rise as a whole for the week. The German information was seasonally adjusted and adjusted for working days, but showed a four percent increase in February. In January, the same exports dropped by a revised 6.4 percent.

Gold and Dollar

As the value of the US dollar continues to rise, the demand for gold is likely to fall back some. Gold is an easy option for investors to turn to when they worry about the value of the dollar falling, but its recent gains in value may cause gold demands to fall as well. In trading, the US dollar rose by as much as 0.6 percent against a group of the six major currencies, including the euro, before it pared the gain. In comparison for the year, Greek debt has pulled down the value of the euro by as much as 6.8 percent prior to Thursday’s trading.

Gold traded in euros also rose in Thursday trading for the fourth straight day. It move as high as 864.6381 euros before the gain was pared some. The unique circumstances in the world currency market is causing a wide range of events to happen. As the euro weakens, some investors are turning to gold. However, as the dollar strengthens, other investors are pulling away from gold.