Congressional leaders have finally agreed on a draft that will allow the US Treasury to buy up to $700 billion of troubled debt securities from the banks. Still, the Bailout Plan has yet to be approved by the Congress and by US President George W. Bush.
There is still a lack of clarity with respect to what the government will pay to acquire the toxic assets, but the Treasury will release more details within 45 days.
The last banks to have suffered the effects of the crisis have been Bradford & Bingley and Fortis, which have been nationalised; while one of the biggest banks in the US, Wachovia, is in talks to be bought.
Tatsuya Kawanishi, junior advisor at FXstreet.com states that "reaching an agreement of the Bailout plain has prevented further degeneration of the situation. Greenback has being slightly lifted back as the worst-case scenario that would crash the financial system was avoided. The appreciation of the USD, however, would be limited, while sowing initial fears of looming financial unrest in the global market."
Related Links
- Read the Information Regarding Recent Federal Reserve Actions at the Fed
- The TARP plan at the Wikipedia
In-Depth Analysis
- Flash Comment - USA: Deal struck but uncertainty has risen by Danske Bank A/S
- Dynamic Carry Basket - Risk Appetite And Carry Frozen As Financial Crisis Evolves While Congress Debates by FXCM
- FX Briefing - US government continues to work on rescue plan by BHF-Bank
- Daily Market Report - European currencies felt heavy pressure overnight as Bradford & Bingley by Wachovia
- A Big Slap in the Face for Free Markets by Money and Markets
- Market Session Snap-Shot - Asian Session - Usd Gains on Bailout Agreement by ACM - Advanced Currency Markets
- London Bullion Report - Gold ignores dollar as bailout nears agreement by The Bullion Desk
- Daily Forex News - Forex - Dollar rose ahead of Monday US lawmakers vote by ACM - Advanced Currency Markets
- Thoughts from the Frontline- Who's Afraid of a Big, Bad Bailout by Millennium Wave Investments
- Weekend Analysis - It seems hard to believe that this could be possible, I know by SwingTradeOnline.com
- Asia Market Update - Asian equities rise and then fall on the proposed US TARP agreement by TradeTheNews.com
- Spot Forex Trades - Wachovia listing a fall down? by ForexSurvivor
- Start the Day - Bradford & Bingley and Fortis nationalised; Wachovia in talks to be bought by Mizuho Corporate Bank
- Daily Forex Commentary - How will the Plan be received? by Jyske Bank
- Daily Market Briefing - U.S. Dollar Falls on Bailout Plan Disagreements by FXCM
- Daily Forex Outlook - Market Still confident of Bailout going into the Weekend by Easy Forex
- Daily Global Commentary - Federal Reserve as Lender of Last Resort – In Pictures by Northern Trust
- European and US summary - Markets Await Results of Bailout Plan by Forexnews.com
- Weekly Review and Outlook - Focus Back to Economic Data after Bailout Plan Finalized by ActionForex.com
- FX Weekly Report - How Will the Bailout Effect USD And The Currency Markets? by www.TradingPostFinancial.com
Related News
- Dollar Hits Intraday Low Vs Yen; Banking Worries Prevail (Dow Jones)
- Dollar Buoyed Vs Euro On Bailout; Down Vs Yen On Wachovia (Dow Jones)
- UK Opposition: UK Bankers Must Take Responsibility For Risks (Dow Jones)
- Dollar pares gains after Citigroup/Wachovia deal (Thomson Financial News)
- Brussels confident Fortis deal to respect EU rules (Thomson Financial News)
- Euro, stg hit slopes vs dlr as bank crisis spreads (Thomson Financial News)
- Stg set for biggest 1-day fall since mid '93 after B&B (Thomson Financial News)
- CHRONOLOGY-Global financial turmoil (Thomson Financial News)
- UK rate futures rally as stocks slide on bank crisis (Thomson Financial News)
- Britain nationalises Bradford & Bingley (Thomson Financial News)
- Euro, Pound Suffer As Banking Crisis Hits Europe (Dow Jones)
- B&B branches to be sold, rest nationalised-govt (Thomson Financial News)
- Swiss franc falls vs dollar ahead of bailout vote (Thomson Financial News)
- Central banks supply cash to keep money markets alive (Thomson Financial News)
- Asian Shares Fall Even As US Bailout Plan Firms Up (Dow Jones)
- Wachovia bank in talks to be bought - sources (Thomson Financial News)
- Bush: bailout helps protect economy from breakdown (Thomson Financial News)
- Euro, pound hit as bank bailouts fuel concerns (Thomson Financial News)
- Dollar o/n rates in Asia ease as U.S. bailout nears (Thomson Financial News)
Blogs
- The Advisor Blog: Starting the bailout week by Valeria Bednarik
- 1st on Forex: Busy
Week Ahead as Crisis Compromise Awaits by Jerry Furst
Analyst Comments
- Marjit Sahota, senior currency strategist at HIFX
The Royal Gazette - "The market has been waiting patiently all week. Most people are quite confident there'll be a positive resolution to the bailout plan. If the deal goes through, the dollar will benefit... There will be a renewed expectation that the Federal Reserve won't be looking to ease interest rate policy further." - Andrew Busch, global FX strategist at BMO Capital Markets
The Royal Gazette - "There's a tremendous amount of uncertainty regarding the bailout plan. (But) we've seen the dollar come back from the lows on the optimism of getting a deal done. I'm fairly certain we're going to see an agreement over the weekend."
