» Forex - Dollar gain on Friday after Citigroup results and credit crisis worries wane.

The Dollar climbed to a seven-week peak against the Yen and moved further away from a record low versus the Euro on Friday after Citigroup’s results sparked hope that the worst of the credit crisis has passed. Citigroup, the largest US bank, posted a quarterly loss of $5.1bio and pretax write-downs of $6bio. Shares in the company rose as investors were appeased by efforts being made to get past its credit problems and drive down costs.
Despite the Dollar’s gains, analysts cautioned that although US bank earnings this quarter have not been as good as some had expected, there are still indications the credit crisis is far from over.
European Central Bank Governing Council member Klaus Liebscher said no room exists to cut euro zone interest rates, adding that he is not ruling out tightening in the region. European interest rates would stay put at 4% until later this year. The Federal Reserve, on the other hand, is seen cutting rates further from the current 2.25%.

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