Posted October 13, 2010
The US dollar fell against the euro and the yen. Federal Reserve meeting keeps investors at bay.
Euro and US Dollar
During the Tuesday’s currency trading day, the US dollar fell against the euro. The euro rose higher to US $1.39 during the trading session. This came after the Federal Reserve’s last meeting minutes were made available. The minutes showed that members of the Federal Reserve believe that it is necessary to take new steps to help boost the struggling US economy.
The news that the Federal Reserve members believed that a new stimulus option was needed helped to boost the euro as investors moved towards the riskier assets of the euro. The euro hit several intraday peaks during the trading day, moving it up for the day overall. Specifically, the minutes showed that many of the participants in at the September 21st meeting believed it would be appropriate for there to be some type of additional monetary policy accommodation made to help boost the struggling economy. This was true if the unemployment numbers in the country remained too high or if prices remained too low.
The yen advanced earlier in the trading session. This came even after the possibility that the Japanese government was likely to intervene in the markets again to keep the yen’s value down. The yen still improved on the day after the release of the Federal Reserve’s minutes. Also occurring on Tuesday was another statement from Yoshihiko Noda, the Japanese finance minster. His statement reiterated the fact that the government would take decisive measures which includes intervening in the market, if it determined it was necessary to do so to keep the yen’s value lower.
The US dollar also pushed against the Swiss franc during the session. It moved close to its all time low against the franc at CHF 0.9555 after the Federal Reserve minutes were announced.
By the Numbers
During the currency trading session on Tuesday, the euro moved from US $1.3877 as of Monday at close in New York to US $1.3914 by the end of trading. The euro moved from Y 113.97 to Y 113.74. The US dollar moved from Y 82.13 to Y 81.74 for the day. The US dollar moved from CHF 0.9647 on Monday evening to Y 81.74 by the end of the day Tuesday. The UK pound moved from US $1.5873 to US $1.5796 for the day. The ICE Dollar Index moved the US dollar from 77.500 to 77.339.