Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Pastimes : Ask Mohan about the Market -- Ignore unavailable to you. Want to Upgrade?

To: John Hunt who wrote (16264)	8/27/1998 8:55:00 AM
From: Link Lady	Respond to of 18056

By Marianne Sullivan Dow Jones Newswires NEW YORK - The flight from high-risk investments continued, boosting the dollar a day after a Russian debt-restructuring package cast still more gloom on the world's emerging markets. The dollar traded near its monthly highs against the mark but eased against the yen as investors, shaken by the global implications of the latest crisis in Russia, rushed to liquidate high-risk exposures and cover short yen positions. Moreover, the negative impact of the ruble's plunge wasn't confined to Europe's exposure to Russian markets. The dollar gains continued to be capped by the threat that the outflows would spread to Latin America, where U.S. exposure is far greater than in Russia. Central banks in Canada, Denmark, Greece, Turkey, Hungary and Venezuela were forced to defend their respective currencies amid the investors' hurried exodus. In Russia, a renewed attack on the ruble yesterday came after initial details of the nation's debt restructuring provided little solace to creditors. The ruble plunged amid growing fears that the government is ready to impose currency controls. The central bank canceled official trading of the dollar at the Moscow Interbank Currency Exchange. "Growth prospects are getting worse by the day as emerging markets slow down," said Chris Iggo, senior economist at Barclays Capital, London. "Markets are dominated by safe-haven flows." He added: "As investors unwind positions in these markets, liquidity concerns are arising." Global deflation fears also have kicked in, battering the currencies of commodities exporters such as Australia, Norway and Canada, which all tumbled against the dollar. Currencies of countries on the periphery of the Euro zone and Central Europe also were hit by the global panic as investors sold off the less-solid currencies to move into the core European currencies, such as the mark. Late yesterday afternoon in New York, the dollar was trading at 144.07 yen, off a bit from 144.32 yen Tuesday in New York. The U.S. currency also was trading at 1.8065 marks, up from 1.8003 marks Tuesday. Sterling fell to $1.6377 from $1.6395. The Canadian dollar plunged - a decline analysts attributed to the ruble's problems. Repeated intervention by the Bank of Canada failed to revive the ailing Canadian dollar. Late yesterday afternoon in New York, the U.S. dollar was trading at C$1.5655, up from C$1.5493 on Tuesday. Commodity-based currencies were hit across the board yesterday amid the growing global financial turmoil and the continued woes of the ruble, a chief commodity-based currency. Fear that Russia will flood the market with commodities to offset its economic woes boosted pressure on the already stagnant prices of commodities. The Mexican peso closed sharply lower against the dollar, pressured by emerging-market woes. Mexico is a major oil producer. The peso was quoted at closing at a mid rate of 9.7550 to the dollar, sharply weaker than its close Tuesday at 9.6150. In Chile, the world's largest copper producer, the peso strengthened against the dollar after the central bank intervened to head off declines amid a speculative attack. The dollar closed at 473.40 pesos, 50 centavos below Tuesday's close. In Venezuela, the largest supplier of crude oil to the U.S., the bolivar closed weaker yesterday. Australia's dollar closed lower, pressured by the dual woes of Asia and falling commodities prices.