Posted November 18, 2010
The US dollar gains as Ireland denies debt concerns. It improves against yen and others.
The US dollar improved during the Tuesday currency trading session. It was sparked by Ireland’s denial of its debt needs. The dollar managed to improve against the Japanese yen, the Australian dollar and the UK pound. During the Tuesday trading session, the US dollar improved against the euro as well. This came after Ireland reported that it had not sought financial support from the euro zone, though some reports indicated that the country could need the financial boost.
In addition, the US dollar improved as US stocks declined. Investors commonly see the US dollar as a safe haven in instances of economic concern. There were also concerns about China that pushed stocks down and increased the US dollar’s value.
The US Dollar Index moved the US dollar up 0.7 percent for the trading day on Tuesday. This moved it from 78.652 on late Monday to 79.215 as of the end of North American trading on Tuesday.
There are some concerns that there could be inflation concerns in the US. The dollar did fall during the day just before the US Labor Department made a statement about wholesale pricing pressures. There is no risk of deflation since the US dollar is weak. Since June, the Dollar Index has showed a drop of ten percent.
The euro fell during the trading session against the US dollar. It moved from US $1.3580 as of the end of trading on Monday to US $1.3493. It had risen to US $1.3655 during the trading day. During a statement made by Prime Minister Brian Cowen, investors learned that the Irish central bank had not applied for any external support from the euro zone to help support its financial concerns. Cowen, Prime Minister of Ireland, stated that the country remains able to meet all of its funding needs through the middle of 2011. However, there are reports that indicate that some European Union officials are encouraging the country to take the bailout.
Against the yen, the US dollar improved as well. It moved up from Y 83.16 as of the end of trading in North American trading to Y 83.31 by the end of the session on Tuesday.
The Australian dollar fell during the trading day. It fell 0.9 percent against the US dollar by the end of trading in North America on Tuesday. It moved to 97.59 US cents. This came after the reading of the policy setting minutes.