Posted September 03, 2010
US dollar drops for the day against euro. ECB interest rate decision holds rates the same.
US Dollar and ECB
The US dollar traded lower on Thursday for the most part. The dollar dropped against the euro during the day's trading but the market did not have an overall significant reaction to the European Central Bank's announcement that it would hold the key lending interest rate the same. The ECB kept the key lending rate at the same record low one percent it has been at. Statements from Jean Claude Trichet stated that the recovery should continue at a moderate pace moving forward.
One of the factors helping the euro was the sale of Spain's five year debt. The sale of some 3.3 billion Euros, equal to $4.2 USD helped to ease the concerns of investors who had feared that the euro zone would struggle long term due to its sovereign debt problems.
In addition, Eurostat, which is the European Union statistics agency released a report during the currency trading session that showed that second quarter gross domestic product in the euro zone improved by one percent. This is from unrevised information from the previous quarterly estimate. In the first quarter, growth in the gross domestic product was revised up to 0.3 percent. That helped to lift the GDP year on year growth data in the euro zone to 1.9 percent. Experts had pegged that initial estate at 1.7 percent.
The European Central Bank also released information about the expected grow in 2010. The ECB expects the gross domestic product will grow between 1.4 and 1.8 percent in 2010. It is likely to grow between 0.5 percent and 2.3 percent in 2011.
The UK pound fell during the trading day. This occurred because of the mortgage lender Nationwide's monthly housing survey which was released during the session. It showed that home prices in the country dropped by 0.9 percent in the month of August.
By the Numbers
The ICE Dollar Index moved the US dollar from 82.514 as of late Wednesday to 82.401. The euro moved from US $1.2799 in late trading in New York on Wednesday and moved to US $1.2820. The US dollar moved from Y 84.46 as of late Wednesday to Y 84.29. The UK pound moved from US $1.5453 to US $1.5401.
Also notable was the Swedish krona, which rose against the euro and the US dollar. It moved by 0.4 percent against the euro and 0.7 percent against the US Dollar.