US Dollar Foreign Exchange

 

US dollar exchange rate mostly unchanged against currency majors, euro

Published on January 9, 2012 by   ·   No Comments

The US dollar’s exchange rate is mostly unchanged in currency trading on Monday as a round of short covering allowed the euro to bounce back from a hammering that had sent it to a 16 month low versus the dollar and its lowest point in more than a decade against Japan’s currency.

The dollar index, which tracks the US dollar against six others, traded at 81.114, slipping from 81.263 on Friday. The index notched a one-year high in Friday activity, extending the run to 81.47 on Monday before retreating.

The euro, meanwhile, changed hands at $1.2770, up from the $1.2725 level late Friday in North America.

“The euro started the week with a new 16-month low early in Asia (at $1.2666), but the market was caught too short too soon and [euro/dollar] has spent most of the overnight session squeezing back towards Friday’s highs, driven more by positioning than fundamental news flow,” said Elsa Lignos, currency strategist at RBC Capital in London.

Data on US futures positions had indicated traders have been building heavy short positions against the euro since late 2011.

A similar short-covering phenomenon was seen on other euro crosses, she said, but added that the shared currency has struggled to make headway “beyond a clean-out of short-term” short positions as investors awaited the outcome of a meeting between German Chancellor Angela Merkel and French President Nicolas Sarkozy.

On the economic front, Germany reported a 0.6% monthly decline in November industrial production after a 0.8% rise in October. Economists had forecast a 0.4% decline.

The euro traded at 98.05 yen, up 0.5% from Friday after touching its lowest level versus the Japanese unit since late 2000.

The US dollar, meanwhile, sat at ¥76.90, down from ¥77.01 late Friday.

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