Dollar trades mixed as uncertainty weighs
Wednesday, 24 September 2008
SINGAPORE, Sept 23 (AFP): The dollar traded mixed today but remained volatile as traders waited for more details on a US government plan to buy mortgage-related assets at the root of a global financial crisis, dealers said.
The greenback eased slightly to 105.35 yen in Asian morning trade from 105.42 in late New York trade Monday. Tokyo markets were closed for a public holiday.
The euro fell to 1.4775 from 1.4796 Monday, when the greenback suffered its worst single-day decline ever against the euro.
At one point, the single European currency swung as high as 1.4866 dollars, its highest level since August 22 and biggest one-day move since the euro's creation in 1999.
The US Congress was debating the proposed 700-billion-dollar financial sector bailout but dealers said that, after initial euphoria, investors had grown more wary over who would pay the final bill and what it could mean for US government debt levels.
"Uncertainties regarding the outcome of the Treasury's rescue plan for the US financial markets have clearly pressed on the greenback as market participants weigh the repercussion effects of the bailout proposed last week," said David Sing at Forex Capital Management.
Dealers said some sections of the market were worried financing the bailout may prove more difficult than expected and put pressure on the dollar, which might force the Fed, the central bank, to consider a rate hike to bolster the currency's attractiveness.
That would not sit well with expectations that US interest rates will be cut significantly to help the economy weather the financial turmoil.
US President George W. Bush and Paulson, who unveiled the bailout scheme over the weekend, want Congress to pass it quickly but there are some who have balked at the idea of giving the administration carte blanche.
The dollar weakened across most of the region. It fell to 31.92 Taiwan dollars from 32.08 Monday, to 1,122.30 South Korean won from 1,138.00, to 46.22 Philippine pesos from 46.31 and to 9,295.45 Indonesian rupiah from 9,305.00.
The greenback also fell to 1.4107 Singapore dollars from 1.4204 but it strengthened slightly to 33.94 Thai baht from 33.91.
The greenback eased slightly to 105.35 yen in Asian morning trade from 105.42 in late New York trade Monday. Tokyo markets were closed for a public holiday.
The euro fell to 1.4775 from 1.4796 Monday, when the greenback suffered its worst single-day decline ever against the euro.
At one point, the single European currency swung as high as 1.4866 dollars, its highest level since August 22 and biggest one-day move since the euro's creation in 1999.
The US Congress was debating the proposed 700-billion-dollar financial sector bailout but dealers said that, after initial euphoria, investors had grown more wary over who would pay the final bill and what it could mean for US government debt levels.
"Uncertainties regarding the outcome of the Treasury's rescue plan for the US financial markets have clearly pressed on the greenback as market participants weigh the repercussion effects of the bailout proposed last week," said David Sing at Forex Capital Management.
Dealers said some sections of the market were worried financing the bailout may prove more difficult than expected and put pressure on the dollar, which might force the Fed, the central bank, to consider a rate hike to bolster the currency's attractiveness.
That would not sit well with expectations that US interest rates will be cut significantly to help the economy weather the financial turmoil.
US President George W. Bush and Paulson, who unveiled the bailout scheme over the weekend, want Congress to pass it quickly but there are some who have balked at the idea of giving the administration carte blanche.
The dollar weakened across most of the region. It fell to 31.92 Taiwan dollars from 32.08 Monday, to 1,122.30 South Korean won from 1,138.00, to 46.22 Philippine pesos from 46.31 and to 9,295.45 Indonesian rupiah from 9,305.00.
The greenback also fell to 1.4107 Singapore dollars from 1.4204 but it strengthened slightly to 33.94 Thai baht from 33.91.