9/8/2008
2:30 PM: EUR/$..1.4097 $/JPY..107.97 GBP/$..1.7524
$/CHF..1.1326 AUD/$..0.8117 $/CAD..1.0685
USD Supported by Bailout
Plan
The greenback was bolstered by the US government¡¯s
decision to bail out Fannie Mae and Freddie Mac,
announced Sunday by US Treasury Secretary Hank
Paulson, sending the dollar to its highest level
since October 2007 against the euro at 1.4059.
Paulson said that ¡°Fannie Mae and Freddie
Mac are so large and so interwoven in our financial
system that a failure of either of them would
cause great turmoil in our financial markets here
at home and around the globe¡±. The
intervention comes amid burgeoning fears that
the mortgage lenders would default, sending ripples
throughout the financial system and exacerbating
an already sluggish economy. Traders overseas
lauded the bailout, sending the Nikkei index higher
by almost 3.4%, the FTSE-100 up by nearly 4% while
yields on US Treasuries rose higher as well.
US economic reports due out in the Tuesday session
include July pending home sales, seen declining
by 1.1% in July from a 5.3% increase in the previous
month and July wholesale inventories. Key data
highlights for the coming week include July trade
balance, August retail sales, PPI, the University
of Michigan consumer confidence survey and July
business inventories.
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