» Dollar rebounded sharply on Friday

The U.S. dollar rebounded sharply on Friday, after a fall in the previous sessions, as trouble in the US credit markets led investors to repatriate funds from overseas. Worries about ongoing problems in the U.S. sub-prime mortgage and corporate bond markets have led investors to shun bets in riskier assets such as foreign stocks this week, helping the dollar recover more than two cents from record lows against the euro as money flows back into the United States. Meanwhile the flight from risk has led some traders to cut their exposure to carry trades, or purchases of high yielding currencies such as the New Zealand dollar, financed by selling low-interest rate currencies like the yen or Swiss franc. The futures market is indicating an 82% chance the Fed will ease monetary policy by year-end, up from 76 percent overnight. Earlier last week, Markets were pricing in just a 50% chance of a quarter point rate cut by year end.

Source : ACM

This entry was posted on Monday, July 30th, 2007 at 8:07 and is filed under ACM. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.