Dollar drops due to banks support prospects

01-28-2009 14:45

Today, traders’ expectations of a soon adaptation by the US government of the bank rescue plan resulted in a fall of the yen and the US dollar against many important currencies. The decline of the dollar was also a result of the expectation that the Federal Reserve will announce extra measures to ease the credit conditions, increasing the pressure on the Greenback. Obama’s ‘bad bank plan’ consists of creating a special institution to take over the ‘toxic assets’ from the US banks and this plan also contributed to the fall of the dollar against the high-yielding currencies.

Analysts expect a growth of the global stock markets as a result of the approval and execution of the ‘bad bank plan’ while currencies such as the US dollar and the Japanese yen may fall significantly below their present levels.

Today 9:37 GMT: AUD/ USD went up from 0.6633 to 0.6674, USD/ JPY showed a minor increase from 89.11 to 89.22, GBP/ USD rose from 1.4115 to 1. 4249, EUR/ USD reached a top level of 1.3315 and went up from 1.3182 to 1.3261.