Posted September 29, 2010
The US dollar falls significantly against euro. Investors worry about Federal Reserve move.
During the currency trading session on Tuesday, the US dollar fell significantly against the euro and other major competitors. This comes after disappointing data out of the United States weighed on investors that the Federal Reserve would possibly take action soon to kick start the US economy.
During the trading day, investors moved away from the US dollar and towards its rivals as investors grew even more speculative as to when the Fed would take moves. The ICE Dollar Index in particular showed that the US dollar fell to the lowest levels it has been at within the index since February. Investors were moving away from the US dollar and towards its rivals. The euro moved to its highest levels against the US dollar since April.
In particular, the US consumer confidence data was not positive. This drop led investors to move towards other currencies, including the Swiss franc. The US dollar fell to the lowest levels it has been at since March of 2008 against the franc.
During the trading day, the US dollar fell against the yen. It dropped to the lowest point it has been at since the Japanese officials intervened in the market a few weeks ago. The Japanese officials are likely to intervene in the markets again should the yen continue to build up higher against the US dollar, euro and other currencies. However, during the Tuesday trade session, there was no evidence that the Japanese officials had intervened in the market.
Also occurring during the session was the drop in the UK pound against the US dollar. The Bank of England's Monetary Policy Committee made a statement on Tuesday indicating that the UK may need to make a new round of asset purchases to help avoid a period of underperformance of the UK economy. The news pushed the pound to the lowest level it has been at against the euro since May.
By the Numbers
By the end of Tuesday, the euro moved from US $1.3444 to US $1.3590. The euro moved from Y 113.25 to Y 114.00. The US dollar moved from Y 84.25 to Y 83.89. The US dollar moved from CHF 0.9857 to CHF 0.9760. The UK pound moved from US $1.5826 to US $1.5802 for the day. The ICE Dollar Index moved the US dollar from 79.502 to 78.904.