Lower Crude Oil Prices and New SEC Rules Help US Dollar
The U.S. Dollar stabilized at the news of measures currently being undertaken by the U.S. treasury and Federal Reserve to calm the financial market, coupled with a sharp decrease in oil prices.
Worries about the state of the U.S. financial system intensified last week following liquidity problems of the two biggest mortgage lenders, Freddie Mac and Fannie Mae, which prompted the U.S. government to produce a rescue plan to bail them out.
Investors are also pleased by the emergency rule issued by the United States Securities and Exchange Commission regarding limiting activities of certain short-selling in the financial market.
On Tuesday, the Chairman of the Federal Reserve System, Ben Bernanke, said in a meeting before Congress, that restoring stability to the financial sector is high on his list of priorities, which suggests that an interest rate hike to curb inflation will not materialize any time soon. The U.S. inflation data is due to be released at 12:30 GMT today, and it is expected to rise by 0.7% for the month of June, compared to a rise of 0.6% for May.
On July 16, 2008 at 07:19 GMT the Euro traded at $1.5926, compared to $1.6038, while the U.S. Dollar traded at 104.10 Yen.