Markets react positively to Saddam's capture
By Financial Times reporters
Published: December 15 2003 6:27 | Last Updated: December 15 2003 6:27
(Yes, you were right. Jay. The psychological effect is working out. An uptick of the USD is good news now that I am donloading some in favor of a couple of other currencies. But you know that what is inevitable always happens, don't you?)
The capture of Saddam Hussein on Saturday was welcome news to global investors, with Asian stocks generally higher after the market opened on Monday, and the US dollar recovering from a series of lows last week.
Asia's export-oriented economies saw their equity markets boosted by the news. Investors expected US benchmarks to rally and the country's economy to improve on lower oil prices and reduced spending on Iraq's reconstruction.
The dollar strengthened against most major currencies. It was being quoted at Y108.01, up from Y107.80 on Friday. It rose against the euro, trading at €0.819, up from Friday's record low of €0.813. The greenback also strengthened against the Swiss franc, trading at fr1.2745, up from fr1.2621 on Friday.
Gold, which like the Swiss franc is considered a safe haven for investors, fell after Mr Hussain's capture. The commodity had soared this year because of global political unease, but was $3.60 lower on Monday morning than Friday's closing price. Spot gold was quoted at $405.25 at 5:20 GMT on Monday, recovering slightly from an intraday low of $401.55. Friday's closing price was 408.85 per ounce.
The price of crude oil also fell on expectation that Mr Hussain's capture might put a stop to sabotage attempts on Iraq's oil pipelines, thus raising Iraq's oil exports.
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