Week Of Massive Shifting

Posted March 23, 2011

US dollar up and down. Oil, debt concerns weigh in.



During the week of March 7th, the US dollar managed movements both up and down throughout the course of the week. Movements were affected by numerous factors including Middle East unrest, debt, oil prices, inflation and the Japanese earthquake.
Weekly Start Off
During the Monday currency session, the US dollar stood at 76.488 by the end of the North American trading session. The currency moved up from the 76.385 it stood at on Friday's close of business. The euro moved to US $1.39712 by the end of the trading session on Monday, after up and down movements throughout the day. It has risen to as high as US $1.4036 during the session.
Monday's trading session was fueled mostly from the fall of US stocks as oil prices eased back from the high of $107 a barrel. Traders are concerned about the rising energy prices that could cause inflationary results.
The Tuesday trading session was marked with gains by the US dollar against the euro and most other rival currencies. Here, the focus was turned back onto the euro zone and the ever increasing concern about sovereign debt in the region. Many experts state that the concerns over these debts, and the debts themselves, could lead to limitations imposed by state governments to keep interest rates as low as possible. Currency traders are hoping to see an increase in the interest rates sooner, rather than later.
During the currency trading session on Wednesday, the US dollar fell against the euro and most other currencies. Although the focus was still on euro zone debt, currency traders were more confident in the results after Portugal managed a successful sell of two year bonds in the country. The cost, though, was significant. This pushed the euro up for the month by 0.5 percent against the dollar.
The Thursday currency trading session saw the US dollar jump again. During this trading session, the currency managed to climb to the highest point in a month against the euro. This came in after Moody's Investors Services downgraded the Spanish government's debt. That put even more worries on the backs of investors who pulled away from the more risky euro and moved back to the safety of the US dollar. The euro zone's debt concerns weigh in heavily on traders throughout the session.
The Friday currency trading session was marked by the Japanese earthquake and tsunami, which hit the country early during the currency trading session. As a result, currency investors moved the Japanese yen heavily. The yen jumped by the most it has moved since the mount of December against the US dollar. In addition to this, the Japanese yen also increased against the euro during the Friday session. The day saw more investors anticipating that Japanese investors and Japanese businesses would be shifting more of their assets back to the yen instead of other rival currencies. This comes after the historic earthquake ravished much of the country's northeastern shore.
By the numbers, the US dollar moved down against the yen on Friday to 81.88. That was a marked drop of one percent from where it stood a day before. Against the euro, the yen moved to 113.77. The US dollar index showed the currency move to 76.746 for the day. Over the course of the week, the US dollar index showed a gain of 0.5 percent, which marks the first gain in four weeks. The euro moved to US 1.3903 by the end of the Friday trading session, for a loss of .06 percent for the week.