On January 26, 2009 in Tokyo, the U.S. Dollar climbed, closing in on a near quarter century high against the Pound Sterling and a 6-week high against the Euro, as worries about the worldwide recession and financial sector difficulties prompted investors to stay away from risky assets.
Investors were also expecting news from the White House regarding the bailout plan for the U.S. financial sector as the U.S. economy struggles with a year-long recession.
According to Lawrence Summers, NEC chief and President Obama's top economic adviser, more money will be needed to stabilize the banking sector. This is a clear indication that the Fed will pump more money into the banking sector to rescue the ailing banks.
The Pound Sterling fell by1.0% against the U.S. Dollar and traded at $1.3665, after touching on $1.3500 Friday, the lowest price in nearly 23 years. The Euro dropped as low as $1.2861, but managed to recover slightly and was down by 0.3% and traded at $1.2934 by mid-day. The European single currency fell to a 6-week low of $1.2764 last Friday as several surveys show that the manufacturing and services sector in the Euro Zone contracted in January.
The Euro moved up slightly, 0.2%, against the Japanese Yen from Friday's late trading in the U.S. and traded at 115.25 yen. The Euro hit a 7-year low against the Japanese Yen, trading at 112.08 Yen, this past week. The Pound Sterling slipped by 0.4% against the Japanese Yen to 121.88 Yen.