US Dollar Recovers

Posted October 12, 2010

US dollar turns up for the day. Traders move to reverse short bets.


US Dollar

During the Monday currency session, the US dollar improved against the euro. That marks the first time in several trading sessions that the US dollar has seen improvements. The US dollar had hit the lowest levels it has been at since 2009 last week. Monday also saw the US dollar improve against several of its major competitors. Trading for the day was light, which encouraged many currency investors to reverse positions set for a further decline in the US currency.

The ICE dollar Index moved the US dollar from 77.295 on Friday to 77.513 by the end of trading in North America on Monday. The Index had closed as low as 76.974 last week, which is the lowest point it has been at since December of 2009. 

The US dollar was under pressure after a weekend meeting of officials from around the world did not lead to any agreement on currency policy. That put traders on the edge as they waited for the US Federal Reserve to make some move towards stimulus.

The Euro

The euro fell against the US dollar during the day. It moved from US $1.3924 as of close of business on Friday in North America to US $1.3880 by the end of Monday. The currency did see a boost during the Asian trading session after the IMF meetings. During those sessions, it rose to a intraday high of US $1.4007.That is the highest value it has been at since January of this year. 

Trading was less than normal during the session on Monday since the bond markets were closed in the US to market the Columbus Day holiday. The markets in Japan and Canada were also closed during the day. This lower volume during the day made any movements and sell offs more pronounced when they may not have been.

UK Pound

During the Monday currency trading session, the UK pound fell to US $1.5877 by the end of the day. It stood at US $1.5957 at the end of trading on Friday. Investors are somewhat concerned about the UK economy. Most of the market investors are focused on the US government offering some type of stimulus for the economy in the States, but more investors are moving towards the same thing happening in the UK government, as the Bank of England may be forced to make some move to help stimulate the UK economy as well.