On July 28, 2008 Merrill Lynch announced that it would write down approximately $5.7 billion for the 3rd quarter and also raise capital by selling shares equivalent to $8.5 billion. Consequently, Merrill Lynch’s losses and write downs in the past year is almost $20 billion and $40 billion, respectively. These hefty write downs and the need to raise additional capital was somewhat offset by worries over the impact of the U.S.-routed financial problems on the world economy, and as a result, the U.S. Dollar traded flat in early trading today.
According to a report yesterday, Lehman Brothers is likely to post a loss this 3rd quarter and a write-down of additional $2.5 billion. Early yesterday, the IMF reported that the global financial markets continue to be “fragile” with possible “elevation” of systemic risk.
It appears that concerns about the financial problems are not limited only to the U.S. currency or U.S. assets. Shares in Europe fell sharply in the early hours of trading in London.
On July 29, 2008 at 08:00 GMT, the Euro changed slightly and traded at $1.5750 to the U.S. Dollar, while the U.S. Dollar was flat against the Japanese Yen at 107.52.