US Dollar Improves Against Euro As Debt Troubles Continue

Posted April 19, 2010

In currency trading on Monday, investors focused in on the Greek debt problems that plagued the euro for yet another debt. In addition, a civil fraud case against mega company Goldman Sachs also affected the movements of traders.


US Economy

There is indication on Monday that the economy was improving on a broad based scale. This information is evident from a Conference Board’s leading indicators. They pointed that the recovery was spreading. This lead numerous currency investors to believe that the Federal Reserve would begin to increase the base interest rate in the country during the second half of this year. Previously, it was believed that this interest rate would hold strong at its record low levels until the beginning of 2011.

By The Numbers

By late day trading in New York on Monday, the euro had fallen from a high of $1.3497 on Friday trading to $1.3475. The US dollar moved from 92.13 Japanese yen on Friday trading to 92.40 yen by the end of trading. The UK pound moved from $1.5394 against the US dollar to $1.5314 by the end of the day’s trading. The US dollar moved from 1.0615 Swiss francs to 1.0614. Also, the Canadian dollar moved to 1.015 from 1.0145 in Canadian dollars during trading.

Greek Debt Plagues Country

As a continuation of last week’s concerns, Greek debt concerns continued to hold back the euro in trading on Monday. Talks about the Greece bail out package, which were expected to occur on Monday where rescheduled for Wednesday. This was due to the difficulties in travel throughout Europe due to the Iceland volcano eruption which grounded most air travel throughout the region. Still, this did not help investors in the currency market during trading.

Investors still are feeling concern over whether or not a bailout plan put in place by other euro zone countries would be enough to protect the country from default. Further stemming some of the concern in the market was the fact that such a plan would only provide enough protection for Greece. It is widely believed that various other countries in the euro zone also have similar debt problems that are likely to surface in the coming months, including Portugal . The euro zone currency has fallen from the US $1.51 where it traded in November.

Goldman Sachs

Also important during trading on Monday was Goldman Sachs which faced an interesting civil fraud case. The Securities and Exchange Commission, a government organization in the United States, believes that the Goldman Sachs, a large investment bank in the country, has defrauded its investors. It did this, the SEC alleges, by failing to disclose important information to investors. The lawsuit against the company could be part of a larger crackdown throughout the financial sector that many believe is likely to occur in the coming months. 

It is still too soon to tell what type of effect this type of scrutiny would have on the financial markets themselves, though the information seemed to cause the market to hold back some.