Posted September 15, 2010
The US dollar fell considerably during the trading day on Tuesday. It fell to 15 year lows against the yen during the day and feel below parity with the Swiss franc as well.
During the currency trading session on Tuesday, the US dollar feel to significant lows. It feel to one month lows against the euro while also moving below parity against the Swiss franc. It also touched near 15 year lows against the yen during the session. All of this may be due to the potential of the Federal Reserve to take action to help boost the US economy. That may have triggered many investors to sell off the US dollar.
During the day, the euro managed to move up 1.5 cents to just above US $1.29, which pushed it out of its recent range between US $1.26 and US $1.28. Much of this improvement for the euro stems from investors moving away from the US dollar. One of the reasons investors are moving like this, some experts say, is due to a conference called at Goldman Sachs Group in which Goldman stated that the Fed could announce a new method to improving the US economy, which he called an asset purchase program. It could go into effect in November.
If in fact this type of asset program is in place, it would hurt the US dollar because it shows yet another signal that the country's key lending rate is likely to remain unchanged going forward for some time. That means that investors cannot make the funds necessary and therefore it leads to the sell off of the US dollar.
The yen's boost was likely due to the reelection of the Japanese leader, who was the head of the country's main party. That did have some weight on the market mainly because investors do not believe he is likely to intervene in the market as other officials would have.
By The Numbers
During the day, the Australian dollar managed to hit a two year high against the US dollar. The UK pound moved up nearly one percent against the US dollar as well.
By late in the day, the euro moved from US $1.2873 as of late Monday to US $1.3020. The euro moved from Y 107.66 to Y 108.20. The US dollar moved from Y 83.65 to Y 83.08. The US dollar moved from CHF 1.0072 to CHF 0.9950. The UK pound moved from US $1.5429 to US $1.5563 for the day.