Post by seanx on Dec 1, 2007 18:59:44 GMT -5
......how can it be good for our country (and sovereignity) to have foreign investors gobbling up our stock market, land, and businesses?
www.reuters.com/article/hotStocksNews/idUSN2061536920071129?sp=true
Dollar gains on corporate demand for month, year-end
Thu Nov 29, 2007 4:44pm EST
NEW YORK (Reuters) - The dollar rallied against most currencies on Thursday, buoyed by demand from U.S. corporations seeking to square their books by month-end and those scrambling for cash to cover a seasonally thin year-end period.
The yen also rallied broadly after steep losses in the previous two sessions on lingering nervousness about the state of global credit markets.
Analysts said U.S. data on jobless claims and new-home sales for October did little to alter expectations that the Federal Reserve will reduce benchmark U.S. interest rates by a quarter percentage point to 4.25 percent next month. Some are even predicting the Fed will ease by half a point.
But expectations of a rate cut failed to stem the rally in the dollar, as markets remained focus on the ongoing global credit crunch and the need to stay liquid.
"I think partly what we're seeing is extreme funding pressure in the money market and people are really in need of dollar funding right now," said Ken Landon, global currency strategist at JP Morgan Chase in New York.
"There's a lot of year-end funding pressure driving dollar London interbank offered rates. So this is something that is helping the dollar at the moment. The Fed has injected liquidity but it's not enough," he added.
Dollar 1-month Libor rates jumped at Thursday's fixing, rising 40 basis points to 5.22500 percent, the biggest jump since November 1999.
In the late afternoon, the New York Board of Trade's U.S. dollar index, a gauge of the greenback against a basket of major currencies, was up 0.8 percent at 75.642 .DXY, moving away from the record low of 74.712 struck last week. The euro was down 0.6 percent against the dollar at $1.4739.
Analysts also said overstretched positioning in the dollar, which in recent weeks has plumbed historic troughs against a number of currencies, made it particularly vulnerable to a correction, analysts said.
"Overall, I get the sense that some people in the market believe the dollar's weakness has been too much and that we may see a bottom to it soon," said Rafael Martorell, chief currency dealer at BNP Paribas in New York.
Some analysts have also suggested rate cuts could help the dollar indirectly as they would help avoid a U.S. recession.
Lower rates typically make dollar-denominated securities less attractive, reducing demand for the currency. However, given concerns about persistent weakness in the U.S. housing and credit markets, signs that the Fed will continue to act to help the U.S. economy should attract investment inflows.
"The Fed may be setting the stage for a healthy recovery. ... Further rate cuts are not necessarily bad for the dollar," said Sophia Drossos, senior currency strategist at Morgan Stanley in New York.
"If the easing is seen as an appropriate response to address blockages to growth, it will help reduce the fear of a hard landing for the U.S. economy," she added.
Expectations of a Fed rate cut next month and of more to come in 2008 got a boost after Fed Vice Chairman Donald Kohn said on Wednesday that renewed financial market turmoil could slow the U.S. economy more abruptly than thought.
The dollar, however, slipped 0.2 percent against the yen to 109.93. Traders said it was being pressured by trading in euro/yen which was down 0.8 percent at 162.05.
The Australian dollar dropped nearly 1.0 percent to 96.97.
Investor focus now shifts to a speech by Fed Chairman Ben Bernanke late in the day.
The Fed slashed overnight lending rates by a half percentage point in September and by a further quarter point in October, bringing them down to 4.5 percent.
www.reuters.com/article/hotStocksNews/idUSN2061536920071129?sp=true
Dollar gains on corporate demand for month, year-end
Thu Nov 29, 2007 4:44pm EST
NEW YORK (Reuters) - The dollar rallied against most currencies on Thursday, buoyed by demand from U.S. corporations seeking to square their books by month-end and those scrambling for cash to cover a seasonally thin year-end period.
The yen also rallied broadly after steep losses in the previous two sessions on lingering nervousness about the state of global credit markets.
Analysts said U.S. data on jobless claims and new-home sales for October did little to alter expectations that the Federal Reserve will reduce benchmark U.S. interest rates by a quarter percentage point to 4.25 percent next month. Some are even predicting the Fed will ease by half a point.
But expectations of a rate cut failed to stem the rally in the dollar, as markets remained focus on the ongoing global credit crunch and the need to stay liquid.
"I think partly what we're seeing is extreme funding pressure in the money market and people are really in need of dollar funding right now," said Ken Landon, global currency strategist at JP Morgan Chase in New York.
"There's a lot of year-end funding pressure driving dollar London interbank offered rates. So this is something that is helping the dollar at the moment. The Fed has injected liquidity but it's not enough," he added.
Dollar 1-month Libor rates jumped at Thursday's fixing, rising 40 basis points to 5.22500 percent, the biggest jump since November 1999.
In the late afternoon, the New York Board of Trade's U.S. dollar index, a gauge of the greenback against a basket of major currencies, was up 0.8 percent at 75.642 .DXY, moving away from the record low of 74.712 struck last week. The euro was down 0.6 percent against the dollar at $1.4739.
Analysts also said overstretched positioning in the dollar, which in recent weeks has plumbed historic troughs against a number of currencies, made it particularly vulnerable to a correction, analysts said.
"Overall, I get the sense that some people in the market believe the dollar's weakness has been too much and that we may see a bottom to it soon," said Rafael Martorell, chief currency dealer at BNP Paribas in New York.
Some analysts have also suggested rate cuts could help the dollar indirectly as they would help avoid a U.S. recession.
Lower rates typically make dollar-denominated securities less attractive, reducing demand for the currency. However, given concerns about persistent weakness in the U.S. housing and credit markets, signs that the Fed will continue to act to help the U.S. economy should attract investment inflows.
"The Fed may be setting the stage for a healthy recovery. ... Further rate cuts are not necessarily bad for the dollar," said Sophia Drossos, senior currency strategist at Morgan Stanley in New York.
"If the easing is seen as an appropriate response to address blockages to growth, it will help reduce the fear of a hard landing for the U.S. economy," she added.
Expectations of a Fed rate cut next month and of more to come in 2008 got a boost after Fed Vice Chairman Donald Kohn said on Wednesday that renewed financial market turmoil could slow the U.S. economy more abruptly than thought.
The dollar, however, slipped 0.2 percent against the yen to 109.93. Traders said it was being pressured by trading in euro/yen which was down 0.8 percent at 162.05.
The Australian dollar dropped nearly 1.0 percent to 96.97.
Investor focus now shifts to a speech by Fed Chairman Ben Bernanke late in the day.
The Fed slashed overnight lending rates by a half percentage point in September and by a further quarter point in October, bringing them down to 4.5 percent.