US Dollar Down Again By Bond Bids

Posted December 03, 2010

US dollar down on European Central Bank data. Investors turn to risk.


The Euro

During the Thursday currency trading session, the US dollar fell against the euro.  The European Central Bank announced that it was buying up euro zone debt. This move was to help offset some of the of negative remarks and disappointment that occurred after the ECB's president made comments on extending some liquidity measures. This helped to calm the fears in the markets and helped give the euro a boost for the day. 

The euro moved from US $1.3129 as of end of the day trading in North American on Wednesday to US $1.3222 by the end of trading on Thursday. It had moved to US $1.32 just ahead of the announcement by the European Central Bank and then fell to a low point of US $1.31 before it began to climb again. 

The European Central Bank President Jean Claude Trichet stated that he would provide special liquidity measures to help commercial banks from now through the first quarter of 2011. He also stated that the program in place to buy distressed sovereign debt through bonds was ongoing. However, he would not speculate if the central bank would actually boost the number of purchases being made.  This initially pushed the euro down against the US dollar as currency traders remained less than happy about the move. However, this flattened out throughout the trading day.

US Dollar

The improving euro held back the US dollar during the currency trading day. The US dollar also fell after a pending home sales data figure showed positive data, which pushed investors towards more risky investments for the day, including the US dollar. Risk assets including oil and stocks all benefited on the day from this information. 

The US dollar index moved the US dollar from 80.734 as of the end of the trading session on Wednesday to 80.21 by end of trading in North America on Thursday.

UK Pound

During the trading session, the Uk pound moved from US $1.5612 as of late in the day on Wednesday to US $1.5591 by the end of trading on Thursday. 


The Japanese yen also moved against the dollar during the day. The US dollar moved from Y 84.16 as of Wednesday's end of trading to Y 83.37. The US dollar saw its gains from earlier in the day fall after the meeting with the European Central Bank.