Posted November 28, 2010
US dollar improves on day. Worry about euro zone debt holds back euro.
During the Friday currency trading session, the US dollar once again was up against many of the major currencies as investors focused specifically on the risks coming out of the euro zone. Investors were worried again today for the risks associated with euro zone debt problems. In addition to this, the concern over what is occurring in the Korean peninsula fueled the move to the perceived safety of the US dollar.
The US dollar index traded the US dollar from 79.740 as of the end of the day in the UK on Thursday to 80.378 by the end of trading on Friday.
The euro struggled against the US dollar throughout the session. It was at US $1.322 against the currency which was down from the US $1.3339 mark it was at when the market closed on Thursday in the UK (the US markets were closed due to the Thanksgiving holiday in the United States.) The euro hit a two month law against the US dollar in early moves when it hit US $1.3199 on the day.
Also affecting the euro was a report issued by Financial Times Deutschland that indicated that the European Central Bank and other euro zone countries were pushing Portugal to take a bailout to prevent the financial crisis from hitting rock bottom. The report was denied during the session by the Portugal market. Nevertheless, the Spanish, Irish and Portuguese currencies struggled throughout the day.
The US dollar improved against the yen during the trading session. The yen moved from Y 83.54 at the end of the trading session on Thursday to Y 84.02 as of the end of the session on Friday.
The UK pound moved from US $1.5758 as of Thursday to US $1.5609 for the day. This indication of a lower UK pound is another indication of the currency market’s need to move to the safer ground of the US dollar as the euro zone continues to battle concerns.
Also affecting the currency markets was information out of Korea indicating further tension between the North and South. The move to the US dollar indicated the concern in the markets that a full out war could further reduce the euro and other currencies. The Korean won fell 1.9 percent against the US dollar to move down to 1159.4.