India Morning Call - Global Markets
FOREIGN EXCHANGE
NEW YORK - The dollar rose from a near record low against the euro on Monday after the United States announced an emergency plan to restore confidence in mortgage finance companies Fannie Mae (FNM.N: Quote, Profile, Research) and Freddie Mac (FRE.N: Quote, Profile, Research), see [ID:nN13387357].
The plan helped calm market concerns about the health of the U.S. financial and housing sectors, since the two companies fund half of all U.S. mortgages.
By late afternoon, though, the dollar had pared some of its gains, with the euro rising back above $1.59, a cent or so from its lifetime high.
Late in New York, the euro was down 0.2 percent at $1.5911 EUR= after slipping to $1.5842. The dollar fell 0.1 percent to 106.10 yen JPY=, well off Monday's high of 106.81, while sterling rose 0.2 percent to $1.9940 GBP=.
Billionaire investor George Soros told Reuters on Monday that government debt accumulation coupled with a U.S. recession leaves the dollar vulnerable. [ID:nN14313468].
Investors will also be watching to see how the latest developments affect Fed Chairman Ben Bernanke's views on monetary policy and the economic outlook when he testifies before the Senate Banking Committee on Tuesday.
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