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Pastimes : Clown-Free Zone... sorry, no clowns allowed -- Ignore unavailable to you. Want to Upgrade?

To: stan_hughes who wrote (361682)	3/12/2008 6:49:27 AM
From: Real Man	Read Replies (1) \| Respond to of 436258

It's not Zimbabwe express, it's a free fall -g-

To: stan_hughes who wrote (361682)	3/12/2008 6:51:51 AM
From: ldo79	Read Replies (1) \| Respond to of 436258

Dollar Declines on Speculation Fed Rescue Package Won't Succeed By Gavin Finch March 12 (Bloomberg) -- The dollar fell on speculation the Federal Reserve's plan to provide funds to banks won't be enough to break the gridlock in money-market lending and stem credit losses. ``Read the need for such new measures as being a symptom of what ails the world and not a panacea for its problems,'' said David Simmonds, the London-based global head of currency research at Royal Bank of Scotland Plc, the world's fourth-biggest foreign-exchange trader. ``Stay short dollars.'' A short position is one where traders bet on a drop in the price of an asset. The U.S. currency also declined as traders wagered the Fed will cut rates by as much as three quarters of a percentage point to prevent a recession, while the European Central Bank keeps borrowing costs unchanged. The yen advanced against the dollar and the euro after Japan's economy grew faster than forecast in the fourth quarter. The dollar fell to $1.5446 per euro by 10:18 a.m. in London, from $1.5338 yesterday, when it declined to $1.5495, the weakest level since the European single currency's debut in 1999. It slipped to 102.97 per yen from 103.42 yen. The euro was at 159.07 yen from 158.61. The U.S. currency also dropped to $2.0191 against the U.K. pound from $2.0064 before Chancellor of the Exchequer Alistair Darling delivers his first budget statement to Parliament at noon in London today. The yen climbed as a revised Japanese government report showed gross domestic product increased an annualized 3.5 percent in the three months through December, faster than the 2.3 percent median forecast of 27 economists surveyed by Bloomberg News. Dollar Peg The U.S. currency was also weighed down by speculation that Gulf central bankers will consider dropping the dollar peg when they meet next week. A Qatari official denied in a telephone interview that the meeting will discuss currency revaluation. The euro extended its gains against the dollar after an European Union report showed industrial production in the region increased for the first time in three months in January, rising 0.9 percent from January, more than twice the rate forecast by economists surveyed by Bloomberg. The euro earlier gained on speculation ECB President Jean- Claude Trichet will highlight inflation risks today at a press conference with fellow policy maker Axel Weber. The ECB's key interest rate is 1 percentage point more than the Fed's 3 percent target rate for overnight loans between banks. Policy makers in the U.S., U.K., Canada, Switzerland and the euro region agreed yesterday on a second round of emergency-loans to curb rising money-market rates. The Fed said it will lend as much as $200 billion of Treasuries through a new lending tool and widen the collateral it accepts to include mortgage-backed securities. Money Markets The euro interbank offered rate, or Euribor, for three month euro loans increased 4 basis points to 4.60 percent yesterday, the highest since Jan. 9, the European Banking Federation said before the Fed's announcement. This is ``not a panacea, more like an aspirin for the dollar,'' analysts led by Daniel Tenengauzer, New York-based head of global currency strategy at Merrill Lynch & Co., wrote in a research note today. ``There is a reasonable risk that this Fed move reflects the depth of their concern with U.S. asset markets, not a Fed formula to resolve U.S. asset-market difficulties.'' The collapse of the U.S. subprime mortgage market has caused losses and writedowns of $190 billion at the world's biggest financial institutions. Concerted action announced Dec. 12 temporarily eased the shortage of cash in money markets at the end of last year.