Pressure on the U.S. Dollar Eases in Tokyo
Global investors are anxiously waiting for today’s (March 18, 2008 close) results of the quarterly results of U.S. Investment Banks such as Goldman Sachs, Lehman Brothers and Morgan Stanley in order to gauge the extent of the liquidity crisis in the financial markets and also identify which other financial institutions have succumbed to the crisis.
In addition, investors expect that at today’s Federal Open Market Committee meeting, the Federal Reserve Bank will move to reduce interest rates by as much 100 basis points.
In early trading in Tokyo at 00:59 GMT on Tuesday, March 18, 2008, the Euro traded at 1.5743, compared to 1.5904 Euro in overnight trading. The yen traded at 97.01, compared to overnight trading of 95.76 yen.
Given the uncertainties surrounding the impact of the liquidity crisis, the direction of the U.S. economy and the interest rate cut by the Federal Reserve, investors believe that the U.S. dollar will remain under extreme pressure. Consequently, many traders are fleeing with their dollar assets and seeking investments in other currencies.