Posted September 23, 2010
The US dollar fell significantly due the trading day. Investors moved towards euro instead.
Euro and Dollar
The US dollar fell to the lowest level it has been at against the euro during the Wednesday trading session. It fell to the lowest level since April against the euro. Investors took signs from the Fed meeting on Tuesday that indicated that the Federal Reserve planned to act quickly to offer some aid to improve the US economy. Investors took to the higher yielding euro as a direct result.
The US dollar was held back by further talk of growth stimulating asset purchases. These are also known as quantitative easing. The US dollar has been hurt by those who are using the low costing US dollars to fund their bets against the higher yielding currencies.
The US dollar also fell against the yen during the trading day. It moved to the lowest level it has been at since the Japanese officials put in some Yen 2 trillion to the market to prop up the US dollar in the effort to hold back the yen. The US dollar fell to Y 84.50 during the day. This may be low enough to signal another move by the government to intervene in the markets to further weaken the yen. However, there were no signs that the Japanese had intervened in the market during the Wednesday trading session. Some believe the officials are holding off until a meeting on Thursday between the Prime Minister of Japan and President Obama.
Norway played a role in the market on Wednesday as well. The central bank kept its key interest rate unchanged during a meeting on Wednesday. It is currently at 2.0 percent. However, it did give signals that it planned to raise borrowing costs soon. This helped the Norway krone improve against the US dollar. The US dollar fell more than 1.2 percent against the Norway currency on the day.
By the Numbers
During the currency trading day on Wednesday, the euro managed to move from US $1.3247 as of late Tuesday to US $1.3394 by the end of trading in New York. The euro moved from Y 112.75 to Y 113.22 for the day while the US dollar moved from Y 85.12 to Y 84.54 by the end of the session. The US dollar moved from CHF 0.9976 to CHF 0.9864. The UK pound moved from US $1.5627 to US $1.5669. The ICE Dollar Index moved the dollar from 80.442 to 79.812.