Dollar slides amid market turmoil
Sunday, 13 July 2008
NEW YORK, July 12 (AFP): The dollar slid to near-record lows against the euro yesterday as financial markets were roiled by fears about the viability of US mortgage finance firms that back trillions' worth of loans.
The European single currency rose to 1.5832 dollars at 2100 GMT from 1.5789 dollars late on Thursday. At one point, the euro hit 1.5943 dollars, not far from its record of 1.6019 reached on April 22.
Against the yen, the dollar fell to 106.25 yen from 107.02.
In late New York trade, the dollar stood 1.0163 Swiss francs after 1.0274 Thursday.
The pound rose to 1.9884 dollars from 1.9789.
Shares of US mortgage finance giants Fannie Mae and Freddie Mac went into a freefall Friday on heightened concerns the firms may face insolvency or a government takeover.
The latest action came amid a new report saying the US government could put the finance giants in receivership, which would make their shares worthless.
Brad Sorenson, an analyst at Charles Schwab & Co, said that "allowing these entities to fail, or even to let things get to the point of it becoming difficult for them to get additional financing" would be "devastating to the US, and indeed the global, financial markets."
Broad falls on world stock markets also undermined the dollar as investors sought refuge in assets not linked to the US economy.
"There may be more of this to come," said Graham Secker of Morgan Stanley. "There's mot much hope on the horizon. We're entering an earnings season that could make it worse."
Concern about a possible war between Iran and Israel or the United States over the Islamic Republic's disputed nuclear program also kept the dollar under pressure, analysts said.
The European single currency rose to 1.5832 dollars at 2100 GMT from 1.5789 dollars late on Thursday. At one point, the euro hit 1.5943 dollars, not far from its record of 1.6019 reached on April 22.
Against the yen, the dollar fell to 106.25 yen from 107.02.
In late New York trade, the dollar stood 1.0163 Swiss francs after 1.0274 Thursday.
The pound rose to 1.9884 dollars from 1.9789.
Shares of US mortgage finance giants Fannie Mae and Freddie Mac went into a freefall Friday on heightened concerns the firms may face insolvency or a government takeover.
The latest action came amid a new report saying the US government could put the finance giants in receivership, which would make their shares worthless.
Brad Sorenson, an analyst at Charles Schwab & Co, said that "allowing these entities to fail, or even to let things get to the point of it becoming difficult for them to get additional financing" would be "devastating to the US, and indeed the global, financial markets."
Broad falls on world stock markets also undermined the dollar as investors sought refuge in assets not linked to the US economy.
"There may be more of this to come," said Graham Secker of Morgan Stanley. "There's mot much hope on the horizon. We're entering an earnings season that could make it worse."
Concern about a possible war between Iran and Israel or the United States over the Islamic Republic's disputed nuclear program also kept the dollar under pressure, analysts said.