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Market Review - 24/11/2008 22:21 GMT
Dollar rises versus yen and falls against euro due to the rally in U.S. stock markets on Citi rescue
Dow Jones industrial average index rallied by 396.97 points or 4.93% to end at 8443.39. The Standard & Poor’s 500 index rose sharply by 51.76 points or 6.76% to close at 851.79. The Nasdaq Composite index surged by 87.67 points or 6.33% to finish at 1472.02.
President George W. Bush said on Monday that he’s prepared to make more financial rescues, while President-elect Barack Obama warned in Chicago that the U.S. faces the loss of ‘millions of jobs’ next year unless the government takes immediate action to resolve the economic crisis.
The Federal Reserve started lending to money market funds on Monday via its new cash facility, the Money Market Investor Funding Facility (MMIFF). Interest-rate futures showed 90% odds policy makers will lower the 1% target rate for overnight lending between banks to 0.5% at their next meeting on December 16. On the data front, U.S. existing home sales fell 3.1% to a 4.98 million annual pace in October, and prices dropped by the most on record.
The single currency rose against the sterling from 0.8430 to 0.8539 after the U.K.’s Debt Management Office said it will issue a record 146.4 billion pounds ($222 billion) of bonds to stave off a recession. That’s an 83% increase from the 80 billion pounds the government originally planned in March. Chancellor of the Exchequer Alistair Darling predicted the economy may shrink by as much as 1.25% next year, the most since 1991. The British retreated briefly after the news and then rose to 1.5185 due to renewed cross buying in sterling versus the Japanese yen on the rally in U.S. equities.
Tuesday will see the release of Japan’s CSPI, German GDP deflator and Gfk index, U.K. Nationwide house prices, U.S. PCE and GDP, consumer confidence and house price index.
Dollar rises versus yen and falls against euro due to the rally in U.S. stock markets on Citi rescue
The greenback rallied against the Japanese yen from 94.94 to 97.15 and euro rose sharply against the U.S. currency from 1.2565 to 1.2955 due to the rally in U.S. stock markets as Citigroup Inc. received $306 billion of U.S. government guarantees for its troubled assets. In addition to U.S. government guarantees, Citigroup will get $20 billion in a cash injection from the Treasury, adding to $25 billion the company received last month under the Troubled Asset Relief Program.
Dow Jones industrial average index rallied by 396.97 points or 4.93% to end at 8443.39. The Standard & Poor’s 500 index rose sharply by 51.76 points or 6.76% to close at 851.79. The Nasdaq Composite index surged by 87.67 points or 6.33% to finish at 1472.02.
President George W. Bush said on Monday that he’s prepared to make more financial rescues, while President-elect Barack Obama warned in Chicago that the U.S. faces the loss of ‘millions of jobs’ next year unless the government takes immediate action to resolve the economic crisis.
The Federal Reserve started lending to money market funds on Monday via its new cash facility, the Money Market Investor Funding Facility (MMIFF). Interest-rate futures showed 90% odds policy makers will lower the 1% target rate for overnight lending between banks to 0.5% at their next meeting on December 16. On the data front, U.S. existing home sales fell 3.1% to a 4.98 million annual pace in October, and prices dropped by the most on record.
The single currency rose against the sterling from 0.8430 to 0.8539 after the U.K.’s Debt Management Office said it will issue a record 146.4 billion pounds ($222 billion) of bonds to stave off a recession. That’s an 83% increase from the 80 billion pounds the government originally planned in March. Chancellor of the Exchequer Alistair Darling predicted the economy may shrink by as much as 1.25% next year, the most since 1991. The British retreated briefly after the news and then rose to 1.5185 due to renewed cross buying in sterling versus the Japanese yen on the rally in U.S. equities.
Tuesday will see the release of Japan’s CSPI, German GDP deflator and Gfk index, U.K. Nationwide house prices, U.S. PCE and GDP, consumer confidence and house price index.
