Market News

The U.S. Dollar dropped against the Japanese Yen today as data for September retail sales showed a sharp decline and investors are beginning to wonder if the government's $250 billion liquidity injection into the troubled banks will be able to keep the U.S. economy out of recession.

Today the Euro gained broadly, leaving the Japanese Yen in the dark, as investors support European government rescue plans to resolve the liquidity problems in the banking systems, with the hope of stemming the worst financial disaster since the 1930s.

The Euro surged against the U.S. Dollar following the unified plan proposed by major European countries in order to rescue their banks from collapse. The currency was at an 18 month low against the U. S. Dollar.

Investors anticipate a coordinated approach to the worldwide credit crisis from the Group of Seven, currently meeting in Washington, DC. As a result, the U.S. Dollar surged to a six-month high against Japanese Yen.

The Japanese Yen fell broadly today while higher-yielding currencies surged as investors’ extreme risk aversion receded following the coordinate efforts by global central banks to reduce interest rates yesterday. The situation remains tenuous as the market awaits additional steps by governments, especially the Group of Seven, who is meeting in Washington this Friday, to stabilize the global financial system and mitigate a prolonged global economic downturn.

The U.S. Dollar dropped against a basket of major currencies today following the announcement by major central banks of interest rate cuts in an attempt to curb the hemorrhaging of the global financial markets. According to analysts, the current financial crisis is the worst experienced since the crisis of the 1930’s.

The Japanese Yen and the U.S. Dollar dropped following the Federal Reserve’s decision today to buy short term commercial paper to assist companies with short term financial needs. The Federal Reserve has established a special-purpose facility which will be responsible for buying commercial paper in the financial markets. This latest move has been approved by the U.S. Treasury Department. According to Dustin Reid of RBS Greenwich Capital, the Fed’s announcement to buy commercial paper will have “a positive reaction in regard to sentiment.”

In early trading in London, the Euro lost significant ground against other major currencies as officials in Europe and the U.K. meet to stave off a worsening financial sector. Conversely, the Japanese Yen saw a rise in its price as a result of global investors seeking safe haven currencies and reducing their risk exposure.

The U.S. Dollar reached a one-year high against a basket of major currencies following the passage of the $700 billion bailout plan which was approved by the U.S. Senate. The Euro slipped slightly ahead of the decision by the European Central Bank on interest rates.

The U.S. Dollar dropped slightly against the Euro today, after seeing some good gains during yesterday’s trading day, as investors’ awaited a decision by the U.S. Senate about the revised financial bailout plan by the U.S. government.

The U.S. Dollar rebounded versus the Euro and Japanese Yen today because investors took a step back from risky positions when it became clear that Wall Street’s largest 1-day sell off in over 10 years was attributed to the refusal by the U.S. Congress to back President Bush’s $700 billion bail out package. The package called for the U.S. Government to buy toxic assets from faltering U.S. banks; the effort is an attempt to revitalize the strained lending markets.

Both the Euro and Pound Sterling fell more than 2% against the U.S. Dollar today as the repercussions of the financial crisis was felt across the Atlantic, prompting the nationalization of some banks in Europe.

The Japanese Yen gained slightly today because of the stalled negotiations regarding the $700 billion bailout package for the United States financial sector. In addition, the demise of Washington Mutual triggered investors to stay aware from risky trades.

The U.S. Dollar dropped today, hurt by investors’ persistent uncertainty about whether or not the U.S. Federal Government’s bail out plan of $700 billion will be effective in mopping up bad bank debt; the drop was furthered along by disappointing U.S. economic data released today.

Lower crude oil prices and weak economic data from the Euro zone helped the U.S. Dollar rebound after the record one-day drop against the Euro.