Posted February 17, 2011
The US dollar falls after Fed minute report. UK pound down after B of E move.
During the currency trading session on Wednesday, the US dollar fell against other currencies specifically after the release of the Fed minutes from its most recent meeting. The January policy meeting showed that officials from the Fed raised their outlook on the economy as a whole. This helped to encourage investors who moved towards the more risky, and often more profitable, currencies, including the euro. The meeting minutes helped to convey that the US economy's recovery is sustainable.
Earlier in the day, the US dollar remained lower against the euro, as well as the yen and the Swiss franc. This came after reports out of the Middle East indicated that Iran will send warships through the Suez Canal. Unstable events in this region have led to numerous changes in the marketplace.
The US Dollar Index showed the currency moving from 78.592 at the end of North American trading on Tuesday to 78.239 by the end of the trading session on Wednesday. During the day, the currency did move as high as 78.791, earlier in the day. This came after some better than expected reports were released about the US housing sector and the wholesale level inflation numbers. This helped to show that the US economy was recovering and that a potential interest rate hike was likely in the future.
The euro moved up for the day on Wednesday. It moved from US $1.3486 at the end of the North American trading session on Tuesday to US $1.3566 by the end of the Wednesday trading day. During the day, it moved to US $1.3567 before the Fed minutes were revealed. After the release of the US data, though, the current fell as low as US $1.3460.
The US Dollar did fall against the Swiss franc as well. it fell by 0.7 percent for the day. This was due to currency traders adjusting positions between the franc and the euro. This pushed the US dollar down against the euro as part of the process.
Against the Japanese yen, the US dollar fell as well. It moved from Y 83.77 at the end of the Tuesday trading session in North America to Y 83.62 for the day on Wednesday.
The US dollar pared its gains against the UK pound. The UK pound to US 1.6094 for the day.