The US dollar gained on Thursday and extended its rally to 14^th day which happens to be longest since 1985. US equities ended lower while Treasury yields touched reached their lowest level in reaction to week US economic data and concerns over Greece and Spain. However, there were also gossips that US Fed could go for further monetary easing after the release of weaker than expected manufacturing data. The US employment data also disappointed as the jobless claims remained unchanged at 370,000 for the week ending May 11^th, 2012.

The dollar index DXY which measures the greenback’s performance against the basked of its six major counterparts jumped to 81.454 on Thursday as compared to 81.359 on Wednesday’s North American trading session.

The single currency fell to 1.2702 versus the US dollar on Thursday as compared to 1.2726 on Wednesday’s late trading hours. Analysts foresee that euro will further decline as it is backed by weak fundamentals in the light of the single currency region’s economy and political crisis. Analysts think that euro’s only notable support level has been seen at 1.2620 against the US dollar and this where it would find support again.

Among other currencies, the British Pound declined to 1.5808 against the US dollar on Thursday as compared to 1.5916 on late Wednesday. Against the Japanese yen, the greenback fell to 79.28 as compared to 80.28 on Wednesday.

The greenback gained on Monday against its major counterparts in reaction to the comments of European Central Bank’s President Mario Draghi who expressed his concerns over the future outlook of the region and also disclosed the possibility of expansion of bond purchase program from the central bank.

Currency Analyst, David Song from DailyFX commented, “It’s becoming pretty clear that the Governing Council will continue to resist calls for a large-scale asset purchase plan, and we may see the ECB push the benchmark interest rate below 1.00% in 2012 as the region faces an increased risk of a major economic downturn in the following year,” he further added, “Still, with many investors calling for the demise of the single currency, the central bank may have little choice but to further expand its nonstandard measures as European policy makers struggle to stem the risk for contagion.”

The dollar index DXY which measures the US dollar’s performance against its six major rival currencies gained to 80.374 on Monday as compared to 80.216 on Tuesday’s late trading hours. The euro fell to 1.2997 versus the greenback as compared to 1.3030 on Friday’s North American trading session. The single currency saw further selling pressure in the market after the news that European Union Finance ministers disclosed that EU member countries agreed to additional bailout funding. Most of analysts believe that 17-nations shared currency now look fundamentally weak.

Among other currencies, the British Pound fell to 1.5497 versus the US dollar as compared to 1.5507 on late Friday. Against the Japanese yen, the US dollar fell to 78.03 as compared to 77.82 on Friday’s late trading hours.

The single currency fell versus the US dollar on Monday in reaction the Standard & Poor’s statement of possible reduction in ratings of AAA rated euro zone member countries.

The 17-nations shared currency was trading on an upbeat note earlier as the German Chancellor Angela Merkel and French President Nicolas Sarkozy showed interest for an overhaul of European Union treaties so that tougher fiscal rules can be implemented on European Union member nations. Later on the news that Standard & Poor’s rating agency could reduce its AAA rating to AA+ for Germany, France, Austria, Finland, the Netherlands and Luxembourg, in case if the reviewers are not satisfied with actions of the European Union.

Senior currency strategist, David Watt from RBC Capital Markets commented, “Market sentiment was buoyant into the North American session and remained so until late in the session when the stability of credit ratings not only in the EU periphery, but also among the core euro zone nations came into question.”

The euro fell to 1.3386 against the US dollar on Monday as compared to 1.3409 on Friday’s late trading hours. The dollar index DXY which measures the US dollar’s performance against its six major rival currencies gained to 78.654 on Monday as compared to 78.609 on Friday’s North American trading session.

The British Pound however gained versus the greenback to 1.5637 on Monday as compared to 1.5596 on late Friday. The Pound Sterling strengthened on the rise of UK’s dominant service sector index. Against the Japanese Yen, the greenback fell to 77.80 as compared to 78.03 on Friday’s late trading hours.

The single currency strengthened on Thursday as the European Leaders reached at a plant to tackle with Greece’s sovereign debt crisis. The new plan devised by European Union comprises of write down of 50 percent of Greek debt held by private bondholders. This is expected to leverage the EFSF up to $1.4 trillion.

Director of currency research, Kathy Lien from GFT commented, “Investors around the world are cheering the fact that the Europeans have sucked it up and done what was necessary to mitigate a deeper crisis in the region, “Their sheer relief that the process hasn’t been drawn out even further (aside from the fact that some technicalities need to be ironed out at the November euro-zone finance ministers meeting) has provided a nice boost to risk appetite.”

The euro jumped to 1.4208 against the US dollar on Thursday as compared to 1.3911 on Wednesday’s late trading hours. The dollar index DXY which tracks the greenback’s movement against its major counterpart currencies declined to 75.883 on Thursday as compared to 76.207 on Wednesday’s North American trading session.

Among other currencies, the Australian dollar gained to 1.0727 versus the US dollar as compared to 1.0393 on late Wednesday. The US dollar also fell against the Japanese yen to 75.92 on Thursday as compared to 76.19 on Wednesday’s late trading hour. The British Pound advanced to 1.6117 against the greenback on Thursday as compared to 1.5967 on late Wednesday.

The single currency slightly gained on Tuesday as European Union and International Monetary Fund assured that the talks would continue for Greece’s debt. The euro was also under pressure when Standard and Poor’s reduced Italy’s credit rating to A from A-plus on negative outlook.

The euro gained to 1.3705 against the US dollar on Tuesday as compared to 1.3685 on Monday’s North American trading session. The euro was initially down in asian trading hours in reaction to reduced credit rating of Italy but later advanced after the news of talks of Eurpean Central Bank for Italian bond purchasing program and news of Greece’s payment of 769 million euros in coupon payments which were due on Tuesday.

Global head of currency strategy, Marc Chanlder from Brown Brothers Harriman commented, “hopes that today’s phone call between Greece and the Troika will result in Greece getting its next 8-billion euro aid tranche, Still, there remain bigger issues that have pushed the euro down 4.9% this month already,”he further added, “While the results of this phone call also likely to be the key event of the day, we continue to suspect that the rapid deterioration in euro-zone economic data and the potential for higher borrowing costs due in part to rating downgrades as likely to be major headwinds for the euro.”

The euro also gained versus the Swiss franc to 1.2157 on Tuesday as compared to 1.20 on late Monday. The dollar index DXY which measures the US dollar’s performance against its major six rival currencies decliend to 76.965 on Tuesday as compared to 77.089 on Monday’s late trading hours.

The US dollar advanced versus the Brtish Pound to 1.5727 on Tuesday as compared to 1.5706 on late Monday whereas against the Japanese Yen declined to 76.41 as compared to 76.54 on Monday’s late trading session. Among other currencies the greenback also fell 0.8 percent versus the Australian unit.