Posted November 26, 2010
The US dollar continues to climb. Euro zone concerns hold back investors.
During the Wednesday currency trading session, the US dollar again improved against the euro and numerous other major competitors. Investors are still very concerned about the euro zone debt concerns, even as positive economic data was released. In early trading during the session, the US dollar did fall against other currencies. This came as the jobless claims were released showing a job in those numbers. The Federal Reserve hopes that the recovery would help to improve global economy strength. This information pushed investors towards the riskier, and potentially more profitable, euro and other currencies.
During the trading session, the US Dollar Index showed the US dollar moved from 79.716 as of late in the day on Tuesday in North American trading to 79.756 by the end of the trading session on Wednesday. It did manage to reach 79,386 during earlier trading.
The euro moved from US $1.3364 in the North American session on Tuesday to US $1.3334 by the end of the trading day on Wednesday. Prior to the day’s trading in the US, the euro fell to US $1.33 for new two month lows not seen since September.
Although positive US economic data pushed the euro higher as investors turned towards riskier currencies, there was still significant concern over the sovereign debt crisis that was brewing in Europe. Europe’s periphery countries such as Portugal and Spain continue to hold down the ability for the euro to expand. The negative news about debt in these countries continues to hold down the positive data coming out of Germany. Although investors believe that the Portugal debt can be managed under a European Union and International Monetary Fund bailout, other countries are looming in the background with further debt concerns. This unknown factor concerns investors.
German business sentiment reports were issued during the day, which showed that the numbers had improved to the highest level since the reunification of the country.
During the trading session, the US dollar improved by 0.5 percent against the US dollar, moving it to 98.13 cents. This currency is traded heavily positive when good economic data is released, like that coming out of the US.
The Canadian dollar moved up by one percent during the session against the US dollar. This currency is also a commodity based investment, therefore improving when economic data is positive.