Forex market believe the worst of the problems
in the US financial system are not yet over
News and Events:The Dollar fell near a record
low against the Euro as investors believe the worst of the problems in the US
financial system are not yet over. While the Dollar has recovered somewhat after
better results than expected from big financial institutions such as Citigroup,
JPMorgan Chase and Bank of America, investors are awaiting more earnings reports
this week.
With the economy suffering as the credit crisis hits the
housing market and banks, expectations for the Federal Reserve to raise interest
rates before the end of the year to curb inflation pressures are fading quickly,
hurting the dollar.
The market's focus remains on a rescue plan for
troubled US mortgage finance giants Fannie Mae and Freddie Mac. On Monday, US
Treasury Secretary Henry Paulson said in an interview with CNBC that confidence
in US capital markets and the US economy was the most important thing to support
a strong Dollar.
The Euro may gain against the Yen as Japanese Investors
ship more funds into higher-yielding currencies for better returns, with traders
watching whether the single currency tops Monday's record high and reaches the
169.92 level.
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