US Dollar Falls as Euro Sees Support

Posted December 15, 2010

The US dollar falls after key Federal Reserve decision. Euro gets boost from positive economic sentiment.

 

US Dollar

During the Tuesday currency trading session, the US dollar saw some negative movement especially after the Federal Reserve announcement that it would maintain the bond purchasing program currently in place as well as keep its ultra low key lending interest rate steady. Investors took to the euro after this, pushing the US dollar down for the second day.

The US dollar moved from 79.281 as of the end of trading on Monday in North America to 79.248 by the end of the trading session on Tuesday.

The US Fed's movement, or lack of movement, was expected for the most part by investors. The Fed remained steady in its decision to continue to buy up to $600 billion worth of US Treasury securities. This is the move the Treasury is taking in an effort to jumpstart the economy in the US. Information out of the Labor Department during the session did show that there was improvement in the US producer price index. It rose by 0.8 percent in the last month. 

Euro

The euro remains positive during the trading session as good economic data out of the German economy helped to encourage investors to head back to the more risky currency. The euro moved from US $1.3403 as of the end of the trading session in North America on Monday to US $1.3411 by the end of the trading day on Tuesday. 

One of the biggest factors during the trading day was out of Germany. Earlier in the trading session, the euro was able to climb to session highs as data out of Germany showed improvement in the country's economic situation. One indicator showed that sentiment was improving towards Germany, which is now Europe's largest economy. It moved from 1.8 points in the month of November up to 4.3 points for December.

Yen

During the session, the US dollar remained very close with the Japanese yen, but did increase slightly. It moved from Y 83.40 as of the end of trading on Monday in New York to Y 83.40 by the end of the trading session on Tuesday.

UK Pound

The UK pound also saw some movement. It moved from US $1.580 as of the end of Monday's trading session to US $1.5785 by the end of the Tuesday session in New York.

 
 

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