Dollar at 13 Year Low Against Yen
The US dollar hit a 13 year low against the Japanese Yen amid doubts about whether US measures to boost the economy will bring quick relief. At the same time the dollar achieved a 23 year high against the British Pound on interbank Forex markets. Many investors are bracing for the tough times ahead for the British economy.
All Eyes on Obama
The dollar dropped to 88.86 yen in Tokyo trading, down from 89.45 in New York late Wednesday, when it briefly hit 87.10, the lowest since July 1995. The euro slipped to $1.2972 from $1.3022 and to 115.27 yen from 116.49 in interbank forex trading. The dollar is expected to fall further is measures taken by the new Obama administration fail to revive the flagging US economy. Said on interbank Forex trader who wished to remain anonymous, “The power of balance in the currency market has been so unstable recently. So if doubts over Obama’s stance on the economy and markets emerge… players will have no choice but to buy the yen.”
Geithner Apologizes For Tax Transgressions
Markets for some reason are concerned about the appointment of Timothy Geithner after he admitted having failed to pay income taxes. At a hearing before the Senate finance committee Geithner apologized over past tax transgressions while promising to act with “strength, speed and care.”
Bank of England to Cut Rates Further
Markets remain concerned with the state of the British economy and many expect the Bank op England to cut rates further next month. In the last three months of 2008 the British unemployment rate rose to 6.1%, the highest in a decade. The pound fell to $1.3879 from $1.3957 in interbank Forex trading and on Wednesday the Pound hit a 23 year low.
Finance Ministers Call On Britain to Take Action
French and Irish finance ministers are calling on the British government to take action to prop up the Pound. The UK is seen as behind the curve in addressing the dismal state of the British economy and banking sector. Both Interbank and retail Forex traders will be watching the actions of the British government closely.
