Posted August 25, 2010
The US stock market falls throughout trading session. US dollar falls as well.
During the morning and early afternoon trading session in New York, a variety of factors affected the movement of the currencies. In particular, the US dollar fell considerably, losing much of the ground it had picked up recently. This came after reports out of the US show that the housing data for July was significantly under what most economists thought would occur. This further put a dampened mood on the markets as further concern about the country's pace of recovery set further into place.
During the trading session on Tuesday, the euro moved to improve against the US dollar significantly. It had recently fallen significantly to the US dollar in recent days. The euro managed to move as high as US $1.27 by the afternoon trading session.
Canadian Dollar and Australian Dollar
Also notable was that the Canadian dollar, as well as the Australian dollar, both pared down some of the earlier losses each currency had during the early portion of the trading session. However, neither currency saw improvements by the middle of the afternoon. Both remained down for the day. Both currencies dropped as a result of the poor economic data, since both are considered higher yielding currencies tied to global growth.
Perhaps nothing more was significant during the trading session on Tuesday than the poor economic data out of the US. The US dollar fell against the yen, which it has been doing in recent days, right after the housing data was released by the government. At that point, the US dollar fell to Y 83.58. That is the lowest level the US dollar has been at against the US dollar since June of 1995. However, it did manage to pull back above Y 84 by afternoon trading.
Perhaps the most important reason investors are concerned about the recent housing data numbers is that it will likely lead to the Federal Reserve taking more steps to work to stimulate the country's economy. Most investors are not happy about such a move, having hoped that the country's economy was already rebounding stronger. However, there is ongoing currency about the economy.
Swiss Franc and Yen
Since the US economic data was less than ideal on the day, the investors turned to other favorable currencies during lowered economic growth. Both the Swiss franc and the Japanese yen are considered safer currencies and investors turned to them during the day. Both improved during the afternoon trading session.
By The Numbers
By the middle of the afternoon in New York trading, the euro had moved from Y 107.95 to Y 106.66. the euro moved from US $1.2665 to US $1.2671. The US dollar moved from Y 85.25 as of late Monday to Y 84.16. The US dollar moved from CHF 1.0405 to CHF 1.0310. The UK pound moved from US $1.5520 to US $1.5457. The ICE Dollar Index moved the Us dollar from 83.143 to 83.119 for the day.