Wednesday, September 24, 2008

Dollar dips on uncertainty over US bailout plan

Reuters, Thursday September 25 2008

* Uncertainty over proposed US bailout plan hits dollar
* Yen slips as Japan trade balance falls into deficit
By Rika Otsuka
TOKYO, Sept 25 (Reuters) - The dollar dipped against the euro on Thursday, hurt by lingering uncertainty over the U.S. government's proposed $700 billion bank bailout plan and worries about damage to the economy from the credit crunch.
The dollar climbed the previous day, with investor confidence in the U.S. currency somewhat restored after reports that billionaire Warren Buffett would invest $5 billion in Goldman Sachs Group Inc and that the Federal Reserve had set up currency swap lines with more central banks.
But that was offset by fears that congressional wrangling could delay or weaken the financial sector rescue plan.
The euro edged up 0.1 percent from late U.S. trade to $1.4640.
Federal Reserve Chairman Ben Bernanke on Wednesday said "extraordinary stress" in financial markets was threatening an already weak U.S. economy, urging lawmakers to support the credit bailout package.
"The sense of panic in the market is receding thanks to steps by the U.S. government, as well as private enterprises," said Tsutomu Soma, senior manager of foreign assets at Okasan Securities.
"But investors remain reluctant to buy the dollar as they are concerned about the U.S. economy," Soma said
The dollar index which tracks the U.S. currency's performance against six major currencies, was down 0.1 percent at 76.888.
The dollar fell slightly against the yen to 106.03 yen from around 106.10 in late New York Trade despite Japanese data showing the country's trade balance swung into a deficit in August for the first time since January as exports slowed and import costs rose.
Still, the data added to worries over the world's No.2 economy as it faces recession fears and financial market upheaval.
The European single currency was up 0.1 percent to 155.36 yen. (Editing by Hugh Lawson) Printable version larger | smaller Business

No comments: