US Dollar Falls as Riskier Currencies Take Hold

Posted September 05, 2010

Investors seek out risk. US dollar falls against euro and other currencies.


During the Friday currency trading session, the US dollar fell against the euro as investors turned to more risky currencies. The yen and Swiss franc also felt the pressure as risk appetites increased during the trading day.

US Economic News

One of the factors that affected the trading day was reports out from the US government. This mixed bag of information did not offer too much hope for investors, but did not further the concerns of a slow down in the economic recovery. A US payrolls report showed a fall that was less than what was expected for the month of August. Also, a US service sector report showed that activity slowed in the same month. The strong nonfarm payroll report did help investors to ease concerns about a double dip recession.

The euro moved to US $1.2891 which is an improvement of 0.5 percent. The euro also advanced against the yen to Y 108.77. The US dollar improved by more than one percent against the yen, to Y 85.22 after the jobs data was released. 

The ICE Dollars Index moved the US dollar to 82.022 a fall of 05 percent.  

High Yields Improve

Those currencies around the world considered to be high yielding currencies, including the Australian dollar all gained against the dollar during the day’s trading.  Investors saw the labor market news as a positive sign for the economy and this pushed investors to the higher yielding stocks. 

During the trading day, the Australian dollar hit a four week high against the US dollar, moving to US 0.9164. The New Zealand dollar moved to a three week high against the US dollar to US 0.7204. The Canadian dollar moved to a two week high against the US dollar with the US dollar falling by 1.4 percent. It moved to C $1.0384 by the end of trading on Friday.

Safe Currencies Fall

Not only did the US dollar fall during the trading session, but so did the Swiss franc and the yen. Both currencies are considered safe havens for investors when economic data is less than ideal. 

The euro moved to 0.9 percent higher during the day, up to 1.3112 against the Swiss franc. This after it hit an all time low earlier in the week at 1.2850. The US dollar was up 0.4 percent to 1.0169 francs.