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Dollar strengthens as Fed injects $200b into financial sector
Wed, Mar 12 2008, 10:48 GMT
by Benny Menashe
| EUR/USD | USD/JPY | GBP/USD | USD/CHF | |
| 1.5575 | 104.2 | 2.022 | 1.0385 | |
| Resistance | 1.55 | 104 | 1.0105 | 1.036 |
| 1.5395 | 103.55 | 2.085 | 1.0345 | |
| 1.527 | 102.7 | 1.9995 | 1.028 | |
| Support | 1.5145 | 102.45 | 1.996 | 1.025 |
| 1.509 | 101.45 | 1.991 | 1.0215 |
The dollar regained some ground against the euro as the central bank pledged to lend $200 billion of Treasuries, in an attempt to break the blockage in the housing market. ``It is a strong attempt to stabilize a crisis,'' Henry Kaufman, president of Henry Kaufman & Co. and the former chief economist at Salomon Brothers Inc., said in a Bloomberg Radio interview. ``It is a further recognition that this credit crisis is deeper and wider, and has been exceedingly opaque, in contrast to earlier credit crises.''
The US dollar rose sharply against most currencies on Tuesday as concerns over the deepening credit crisis abated. The Euro reached highs of $1.5490 in European trade before falling to lows around $1.5285, and was last seen trading around $1.5368 9:00GMT. The Japanese yen weakened from levels near JPY 101.55 per US dollar to JPY 103.55, and last seen trading near 103.17 9:00GMT.
US trade deficit widened in January, with the trade gap increasing to $58.2 billion. Imports rose to an all time high mainly due to rising oil prices, which averaged $84 per barrel throughout January. The weaker greenback helped exports and kept the deficit to less than expected.
US sharemarkets surged yesterday, following the Federal Reserve’s decision to add up to $200 billion to credit markets. Financial stocks led the gains following the move. The Dow Jones index closed up by 416pts or 3.6% and the NASDAQ gained 86 pts. US treasury prices fell following the measures to increase credit liquidity.
Today, UK trade balance came in at -7.503b from -7.5b, but sterling continued its gain on the dollar. The Monthly Budget statement in the US is also due today, but the market will be focused on the crude oil inventories report.
Today's Economic Events
| Time | Event | Currency | Period | Previous | Forecast | Significance |
| 21:45 | Retail Sales m/m | NZD | 0.10% | 3 | ||
| 14:30 | Crude Oil Inventories | USD | 3 | |||
| 10:00 | ZEW Expectations | CHF | Mar | -55.6 | 1 | |
| 10:00 | Industrial Production m/m | EUR | Jan | -0.20% | 2 | |
| 9:30 | Trade Balance | GBP | Jan | -7.6b | 3 | |
| 7:45 | CPI m/m | EUR | Feb | 0.10% | 2 |
Published on Wed, Mar 12 2008, 10:52 GMT
Archive
- The Sterling tumbles as traders bet on a rate cut to 2%
Published On Tue, Dec 2 2008, 10:35 GMT - Expectations for Rate Cuts Support The Yen
Published On Mon, Dec 1 2008, 11:54 GMT - The Yen Hold Firm against the Dollar
Published On Fri, Nov 28 2008, 10:36 GMT - The Dollar is Pressured by the Rise in Equities
Published On Thu, Nov 27 2008, 11:02 GMT - Market remains skeptical despite new steps, dollar stable
Published On Wed, Nov 26 2008, 10:52 GMT
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