Dollar falls against euro, pound amid mortgage, credit fears
Sunday, 12 August 2007
NEW YORK, Aug 11 (AFP): The US dollar fell against the euro and the British pound yesterday as fears about the US mortgage market and a related credit crunch unsettled financial markets.
Analysts said the dollar weakened partly as some speculators bet up the odds that the mortgage and credit woes would force the US Federal Reserve to trim interest rates in coming months.
The euro jumped to 1.3692 dollars around 2100 GMT, up from 1.3673 dollars in New York late Thursday.
The dollar also dipped against the British pound, as the pound rose to 2.0231 dollars, compared with 2.0225 dollars a day earlier.
The US currency did manage, however, to notch up some gains against the Japanese yen, rising to 118.37 yen from 118.17 late Thursday.
In late New York trading, the dollar was at 1.1986 Swiss francs, compared with 1.1967 a day earlier.
The dollar dipped against the euro after the Fed injected 38 billion dollars into the US financial system in a bid to bolster confidence after shares fell sharply Thursday.
Shares remained volatile Friday as concerns about the troubled mortgage sector continued to roil Wall Street. The leading Dow Jones Industrial Average closed down 31.14 points, or 0.23 per cent, at 13,239.54.
Speculators had bid up the dollar late Tuesday after the Fed opted to keep US short-term interest rates on hold at 5.25 per cent, but sentiment turned Friday leading to a weakening of the dollar.
The Australian and New Zealand dollars also came under pressure as investors scaled down risky positions.
Traders said the yen gained some support, however, because of the view that Japanese financial firms' exposure to the US mortgage woes is smaller than that of their US and European counterparts.
The Bank of Japan injected one trillion yen (8.5 billion dollars) into money markets Friday to try to ease a liquidity squeeze but the move failed to staunch sharp losses in domestic share prices.
The European Central Bank pumped more money into the eurozone banking market, taking its cash injections to 155.85 billion euros (212.98 billion dollars) in just two days.
Analysts said the dollar weakened partly as some speculators bet up the odds that the mortgage and credit woes would force the US Federal Reserve to trim interest rates in coming months.
The euro jumped to 1.3692 dollars around 2100 GMT, up from 1.3673 dollars in New York late Thursday.
The dollar also dipped against the British pound, as the pound rose to 2.0231 dollars, compared with 2.0225 dollars a day earlier.
The US currency did manage, however, to notch up some gains against the Japanese yen, rising to 118.37 yen from 118.17 late Thursday.
In late New York trading, the dollar was at 1.1986 Swiss francs, compared with 1.1967 a day earlier.
The dollar dipped against the euro after the Fed injected 38 billion dollars into the US financial system in a bid to bolster confidence after shares fell sharply Thursday.
Shares remained volatile Friday as concerns about the troubled mortgage sector continued to roil Wall Street. The leading Dow Jones Industrial Average closed down 31.14 points, or 0.23 per cent, at 13,239.54.
Speculators had bid up the dollar late Tuesday after the Fed opted to keep US short-term interest rates on hold at 5.25 per cent, but sentiment turned Friday leading to a weakening of the dollar.
The Australian and New Zealand dollars also came under pressure as investors scaled down risky positions.
Traders said the yen gained some support, however, because of the view that Japanese financial firms' exposure to the US mortgage woes is smaller than that of their US and European counterparts.
The Bank of Japan injected one trillion yen (8.5 billion dollars) into money markets Friday to try to ease a liquidity squeeze but the move failed to staunch sharp losses in domestic share prices.
The European Central Bank pumped more money into the eurozone banking market, taking its cash injections to 155.85 billion euros (212.98 billion dollars) in just two days.