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Strategies & Market Trends : The coming US dollar crisis -- Ignore unavailable to you. Want to Upgrade?

To: RockyBalboa who wrote (9597)	7/17/2008 4:43:17 AM
From: RockyBalboa	Read Replies (1) \| Respond to of 71475

The market has some doubts: Forex - Dollar falls on financial worries, reports wealth funds cutting holdings Thu, Jul 17 2008, 08:31 GMT afxnews.com LONDON (Thomson Financial) - The dollar fell against the euro as traders became sceptical whether the U.S. currency's gains on Wednesday are sustainable amid ongoing fears for the financial sector. On Wednesday a major rally on equity markets driven by strong corporate earnings reports, a falling oil price and punchy U.S. inflation figures helped the dollar post significant gains. But with investors still uncertain about the future of government sponsored mortgage giants Freddie Mac and Fannie Mae (GSEs) markets were unwilling to provide the dollar with any further support. "The question remains whether the furore surrounding GSEs and an expected reluctance to load up on corporate debt will lead to funding problems that today's lower dollar is already signalling?" said Gavin Friend, currency strategist at Commerzbank. In addition a report in the Financial Times that some of the world's largest sovereign wealth funds are diversifying out of their dollar-denominated assets has also weighed on the U.S. currency. The FT said one major fund in the Gulf has cut its dollar-denominated holdings from over 80 percent to less than 60 percent over the past year. "This news is nothing ground breaking but the continued high profile of the whole situation is unlikely to stir support for the embattled US Dollar in the medium-term," said Matthew Foster-Smith at Thomson IFR Markets. With no major data due on Thursday in Europe, analysts said movements in equity and commodity markets are likely to drive currencies this morning, with U.S. weekly jobless claims and housing start figures due on Thursday afternoon. Meanwhile the pound was hovering around the $2.00 mark, steadying after sliding on Wednesday on figures showing the UK claimant count rose at its fastest rate for 16 years during June. With no major UK data due on Thursday focus is likely to be on the deadline for banking giant Barclays' $4.5 billion rights issue. "Should financials rebound further today, rights issues will look attractive again suggesting a successful refunding of the institution," said analysts at BNP Paribas. "Hence, the equity market performance today might have a bigger impact on sterling than usual," they added. London 0802 GMT Sydney 0000 GMT U.S. dollar yen 105.40 up from 105.10 Swiss franc 1.0165 down from 1.0177 Euro U.S. dollar 1.5856 up from 1.5827 yen 167.10 up from 166.305 Swiss franc 1.6120 up from 1.6104 pound 0.7929 up from 0.7915 Pound U.S. dollar 1.9997 down from 2.003 yen 210.75 up from 210.134 Swiss franc 2.0325 down from 2.03461 Australian dollar U.S. dollar 0.9765 up from 0.9754 pound 0.4883 up from 0.4878 yen 102.92 up from 102.495 rachel.armstrong@thomsonreuters.com bhx/ng/rar/jlc COPYRIGHT Copyright Thomson Financial News Limited 2008. All rights reserved.