Saturday, July 3, 2010

Euro Reaches 6-Week High Against US Dollar

Terrible economic news last week had the euro end Friday up against the US dollar to its highest level in 6 weeks.

The US economy lost 125,000 jobs in June, the first monthly drop in six months, and combined with other bad economic news, has investors and consumers concerned over whether or not we're in a recovery at all, or the huge amount of money thrown at the economy only masked its inherent weaknesses.

The euro rose to $1.2553 in afternoon trading in New York from $1.2480 late Thursday. Right after the Labor Department said that 125,000 jobs were lost in June in the U.S., the euro topped off at $1.2613, its highest level since May 21.

While some have interpreted this as a nod toward avoiding the worst in Europe, it's highly doubtful that's the case, and there's a lot to play out there before we're through.

1 comment:

Abhid-d said...

It may be debated as to how far fluctuations in the currency based on market speculations, rather than normal reserve balances, are justified.

The Euro's strength must be guaged on its export products and the robustness of its economy also. The recent crisis in Greece and falling exports should not (theoretically) allow the Euro to get stronger against other currencies. Merely market floats, and hedge trading may not give an accurate picture of a currency's strength.

Thank you.