Posted February 16, 2011
US dollar improves on risk aversion. Euro debt concerns weigh.
During the Friday currency trading session, the US dollar gained. Many investors moved away from the risks of the euro and other currencies. The Egyptian President's resignation also played a role in the day's trading session. Many investors were continued concerned about the safety and the risk of the euro. Due to these concerns, many investors turned to the perceived safety of the US dollar, lifting it higher for the day.
The US dollar index moved the US dollar from 78.221 as of the end of trading in North America on Thursday to 78.379 by the end of the Friday trading session. During the day, it rose as high as 78.697 before paring those gains in afternoon trading. For the week, the US dollar index moved up by 0.4 percent.
Investors are still concerned about euro zone debt, and because it has yet to be resolved, it has surfaced in a reaction in the euro during the Friday session. Moody's Investors Services also downgraded unsecured debt ratings of six Irish banks, putting debt concerns on the front of investor's minds. Egypt also made the euro less than an ideal investment for the day.
The euro moved from US $1.3603 as of the end of trading in North America Thursday to US $1.3558 by the end of the trading session on Friday. On the week, the euro fell by 0.2 percent against the US dollar.
The British pound also was influenced by the day's events. The pound moved from US $1.6096 at the end of North American trading on Thursday to US $1.6031 by the end of the Friday trading session.
The US dollar improved against the yen during the trading day as well. It moved from Y 83.35 at the end of the Thursday currency trading session in North America to Y 83.46 by the end of the Friday session. Against the yen, the US dollar has improved by 1.6 percent for the week.
During the trading day many investors moved away from the risks and higher yields found in various major currencies against the US dollar and moved to the perceived safety of the US dollar. This was due heavily in the euro versus US dollar movements because many investors did not want to be stuck with the riskier currency throughout the weekend when nothing could be traded, but the unrest in Egypt was continuing to grow.