Posted May 18, 2010
During the currency trading session on Monday, the euro was able to move up slightly. It pulled up from its lows against the US dollar though it remains clearly under pressure.
The euro's hold backs for Monday continued from last week. While the euro was able to improve slightly during the currency trading session, the improvements were considerably low. The euro zone sovereign debt concerns continued to hold back the euro from any type of marked improvement for the day.
The euro did manage to increase from its four year lows hit during an overnight trading session. The currency fell to the lowest level since April of 2006 during that overnight trading session. Throughout the day, the currency moved up and down, as if traders were still unsure of where the currency should be at. In addition, the global stock markets also rose and fall throughout the course of the trading session. US stocks were able to pare some of their losses during the afternoon. That helped the euro to improve from its lowest drop.
Many investors threw in the towel during the trading session over night. However, throughout the day, the euro was able to rebound as people realized that there is still an opportunity for Europe to take steps to control the debt concerns. On Monday, the finance ministers of 16 countries that use the euro as the common currency will meet to discuss the lack of confidence investors have.
By the Numbers
At its lowest point in four years, the euro dropped to US $1.2234 overnight but by mid afternoon was at the key US $1.24 point, up or down slightly from this psychological level.
By late Monday afternoon, the euro moved from US $1.2372 as of late Friday during the trading session to US $1.2388. The euro moved from Y 114.33 to Y 114.55 by the afternoon. The US dollar moved from Y 92.35 to Y 92.48. The US dollar was at CHF 1.1318 on late Friday and moved to CHF 1.1311 by Monday afternoon. The UK pound moved from US %1.4537 on Friday to US $1.4482 on Monday.
The ICE Dollar Index moved the US dollar from 86.201 to 86.205.
The euro has dropped 7 percent since May 1st., according to Scotia Bank.
The UK pound's movement on Monday was due to the fears of the new government in place. Investors are concerned that the new officials in place could reveal their fiscal problems that are worse than what was revealed previously. This moved the UK pound to lows it has not seen in 13 months, though it rebounded slightly.
Though much of the currency trading has focused on the Euro zone's current debt problems, there is still the Chinese currency problems that need to be addressed. China has returned as a new buyer in Treasurys. This marks the first time it has done so in six months. The move was part of a broad demand in place for US assets. Concerns over China's currency valuation did not play a role in the up and down movements of the currency market on Monday, but still are on the minds of investors.