US Dollar Continues Fall

Posted April 26, 2011

Good economic reports push investors to risk. Sell off of US dollar continues.




During the Money currency trading session, the US dollar improved against the euro but continued its losses against the Japanese currency. This came after the credit rating agency, Standard & Poor's reduced its outlook for the United States government credit to negative, from a level of stable. The US dollar managed to come back, though, as there was massive negative reaction to a national election in Finland that put fears into the euro zone that Greek debt restructuring would be difficult. During the day, the US Dollar Index moved the currency to 75.504 for the day, which is up from 74.867 it was at on Friday. The euro fell from US $1.4429 as of the end of trading on Friday to US $1.4233 by the end of the Monday session. Against the Japanese yen, the currency fell to Y 82.65 which is down from the Y 83.58 it was at on Friday.


The focus of the Tuesday currency trading session was on the US dollar. It continued to weaken against the euro during the Tuesday session, as improved economic data came from the UK, which helped to reduce concerns about the euro zone's debt problems. For the day, the US Dollar Index positioned the currency at 75.038 at the end of New York trading. The euro moved to US $1.4339 during the day. Against the yen, the US dollar moved to Y 82.45 for the day.


During the Wednesday currency trading session, the euro improved the most it has since January of this year. This comes on the improving stocks and corporate earning information. This helped to show investors that there is a reason to move out of the safety of the US Dollar and increased the value of currencies such as the Australian dollar. The US Dollar Index moved the currency to 74.384. For the year 2011, this is a drop of 5.9 percent thus far. The euro moved to US $1.4511 for the day, which is the largest gain in a day in the last three months. Against the Japanese yen, the US dollar moved to Y 82.41. Strong US corporate earnings helped to increase the risk appetite of investors during the day's session.


During the currency trading session on Thursday, the US dollar fell to a new 16 month law against the euro zone currency as well as against the British pound. This came with strong US corporate data coming in and a further rise in equities. This led investors to more risk and away from the perceived safety of the US dollar. For the day, the euro managed to rise as high as  US 1.4648 during the day, which is the highest it has been since December of 2009. It managed to close the day at US $1.4545 for the day. The US Dollar Index moved the currency to trade at 74.126 for the day, though it was trading below 74 during the day. The US dollar moved to Y 81.782 for the day. During the week thus far, the US Dollar Index showed the currency losing 1.2 percent. This is the fourth week in a row that the currency has posted a significant loss. It is also the largest drop this week since the middle of March 20111. The euro managed to improve by 0.8 percent for the week, helped by the European Central Bank's improvements on interest rates.  The US dollar was down 1.6 percent against the yen.


The stock markets were closed on Friday in observance of Good Friday and the Easter holiday, as well as a legal bank holiday in many of the European markets.