|
Dollar Falls on Speculation
Housing Slump to Swell Bank Losses
Agnes Lovasz and Stanley White
Bloomberg
Tuesday, March 18, 2008
The dollar fell against the euro, erasing most of yesterday's
gains, on speculation the worst U.S. housing slump in a quarter
of a century will swell credit-market losses.
The currency weakened against the Japanese yen and the Swiss
franc after Bank of America Corp. predicted the Federal Reserve
will lower its target rate by another 75 basis points this year
following a reduction to 2.25 percent yesterday. Reports this
week on U.S. mortgage demand and manufacturing will probably show
the economy is slowing.
``We're approaching a dollar low, but we probably haven't seen
it yet,'' said Adrian Schmidt, senior currency strategist in London
at Royal Bank of Scotland Group Plc, the fourth-biggest currency
trader. ``The market still expects the Fed to cut aggressively,''he
said, adding that the U.S. currency may fall to as low as $1.65
before rebounding later this year.
(Article continues below)
The U.S. currency fell to $1.5757 per euro at 9:59 a.m. in London,
from $1.5625 yesterday, when it rose 0.7 percent, the most since
Feb. 7. The dollar declined to 98.23 yen, from 99.85 yesterday,
when it surged 2.7 percent, the biggest gain since January 1999.
The yen traded at 154.76 per euro, compared with 155.95 yesterday.
The dollar declined to 0.9911 Swiss franc from 1.0024. The franc,
often favored in times of crisis, has advanced 14 percent this
year. The U.S. currency fell 0.3 percent to 92.98 U.S. cents per
Australian dollar and slipped 0.6 percent against the New Zealand
dollar to 81.19 cents.
Extends Decline
The dollar extended its decline against the euro, the yen and
the Swiss franc on speculation some European and U.K. banks were
in difficulties.
``There are rumors doing the rounds on various financial institutions
being in trouble,'' said Adam Cole, the London-based head of currency
strategy at Royal Bank of Canada, the nation's biggest lender.
``European and U.K. banks are rumored to be in trouble.''
HBOS Plc, Britain's biggest mortgage lender, said it has ``ready
access'' to funding after the company plummeted in London trading.
|
INFOWARS:
BECAUSE THERE'S A WAR ON FOR YOUR MIND
|
|
