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The Dollar declines dramatically as bank bailouts worry traders

By:   Finotec
  • 09-22-2008
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Goldman Sachs and Morgan Stanley came to the decision that there is no future in remaining investment banks

EUR/USDUSD/JPYGBP/USDUSD/CHF

Resistance		1.4725
1.4705
1.4620		108.35
108.00
107.45		1.8795
1.8590
1.8480		1.1290
1.1175
1.1060

Support		1.4450
1.4395
1.4245		105.55
105.25
104.00		1.7540
1.7450
1.7420		1.0900
1.0880
1.0845

The greenback reached a three-week low against the euro before reports this week that will probably show tighter lending rules contributed to a drop in U.S. home sales and durable goods orders. The dollar also fell against the Swiss franc as two- year Treasury yields declined for the first time in three days on bets the Federal Reserve will cut interest rates. ``Problems with the U.S. deficit will haunt the dollar,'' said Masanobu Ishikawa, general manager of foreign exchange at Tokyo Forex & Ueda Harlow Ltd., Japan's largest currency broker. ``Spending such a large amount on this rescue package will remind traders that the fiscal health of the U.S. is set to worsen.'' The EUR/USD is currently trading at $1.4566 as of 7:48am, GMT.

The sterling declined for a third day against the euro and declined versus the dollar after an industry report said U.K. house prices slid a fourth month in September, adding to evidence Britain might have entered a recession. The property market may face further weakness in coming months, provoking a ``painful'' adjustment for many families, Bank of England Chief Economist Spencer Dale said last week. HBOS Plc agreed to a takeover by Lloyds TSB Group Plc after plunging home values and the financial-market crisis destroyed the value of the company and added to the threat of a recession. The GBP/USD is currently trading at $1.8441 as of 8:02am, GMT.

Wall Street that shaped the financial world for two decades came to an end last night, when Goldman Sachs and Morgan Stanley came to the decision that there is no future in remaining investment banks now that investors have determined the model is broken. The Federal Reserve's approval of their bids to become banks ends the ascendancy of the securities firms, 75 years after Congress separated them from deposit-taking lenders, and caps weeks of chaos that sent Lehman Brothers Holdings Inc. into bankruptcy and led to the rushed sale of Merrill Lynch & Co. to Bank of America Corp. ``The decision marks the end of Wall Street as we have known it,'' said William Isaac, a former chairman of the Federal Deposit Insurance Corp. ``It's too bad.''

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Derivative and forex trading broker Finotec is a division of leading real-time Internet trading company Finotec Trading Inc, which pioneered the world of online forex trading in 1998. After launching our revolutionary forex online trading platform in 2001, we continued to improve our services and ...



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