Posted December 08, 2010
US dollar improves for second day. Interest rates keep Australian and Canadian dollars steady.
During the currency trading day on Tuesday, the US dollar improved again, for the second day in a row against most other major currencies. The dollar started out lower against the euro, but investors turned away from the euro after a parliament vote in Ireland pushed investors to safer ground. The vote was for a deficit cutting austerity budget the country hopes to put into place.
The US dollar also benefited during the session as a tax compromise plan in the US went into motion. The US dollar saw improvements as the Treasury bond yields increased as well. The US dollar looked more attractive during the trading session to investors. The US dollar index improved from 79.973 on late day trading on Monday in North America to 79.973 by the end of the Tuesday trading session.
During the trading session, the euro moved from US $1.3318 as of end of the day trading in North America to US $1.3259 by the end of the Tuesday session. During the trading session, Ireland’s parliament’s budget vote was expected. The decision was to raise fuel taxes. The country must still approve its budget and the 85 billion euro aid package that is being provided to the country by the International Monetary Fund and the European Union.
The US dollar improved against the Japanese yen as well. It moved up from Y 82.64 at the end of the Monday currency trading session. It moved to Y 83.51 by the end of the Tuesday trading session.
In addition to the other currencies, the US dollar rose against the Canadian counterpart. The Canadian dollar moved lower after the Bank of Canada decided to keep its target lending rate steady at one percent. This moved the US dollar up 0.7 percent for the day to C $1.0125 for the day. The US dollar had fallen as low as C $1.0007 right before the bank’s decision.
In addition to this, crude oil prices fell during the session, which weighed in on the commodity based currencies of the Canadian dollar and the Australian dollar.
The UK pound moved up against the US dollar on positive data out of the country’s manufacturing output. The UK pound improved to US $1.5765 for the day, a rise of 0.3 percent.