Posted February 16, 2011
Data promotes movements. US dollar struggles early.
During the Tuesday currency trading session, the US dollar pared most of the losses it had by the late afternoon trading session. The losses came after US retail sales data provided a look at the US economy and the outlook was less than strong. The weaker than expected data hurt the US dollar during the early portion of the day, but it was not enough negative information to trump security issues in the Middle East.
Trouble and growing tensions in Middle East countries caused many investors to sell off the perceived higher risk currencies including the euro to head for safer ground in the US dollar. In addition to this, investors are still scrambling to gain momentum against the ever increasing euro debt problems. In addition, many investors moved to the US dollar ahead of the Wednesday policy meeting minutes due out from the Federal Reserve. The US dollar is up, then from a move away from more risk, rather than because of anything the US dollar is offering traders.
The US Dollar Index moved the US dollar from 78.602 at the end of the North American trading session on Monday to 78.592 by the end of the Tuesday trading session. Prior to the announcement of the less than ideal retail information from the US Department of Commerce, the currency was at 78.509 for the day. That report indicated that US retail stores rose just 0.3 percent in the month of January, which is less than what most analysts were hoping for.
The euro traded at a higher level on Tuesday compared the previous day's trading. This happened after European offices agreed that the euro zone's emergency fund, called the European Stability Mechanism, would be able to lend as much as 500 billion euros. There are still other areas of this fund left unchanged and undecided, which continues to consider investors. The euro moved from US $1.3507 at the end of the Monday currency trading session in North America to US $1.3486 by the end of the Tuesday trading session.
Against the UK pound, the US dollar was down. It moved from US $1.6036 at the end of the North American trading session on Monday to US $1.6125 by the end of the Tuesday session.
The US dollar was up against the Japanese yen for the day. It moved from Y 83.26 at the end of the Monday session and moved to Y 83.77 by the end of the Tuesday session.