As reported at 9:28 a.m. GMT on March 23, 2009 in London, the U.S. Dollar continued to sag as risk appetite improved after details of a U.S. arrangement to remove so-called toxic assets from banks’ balance sheets was revealed. The news announced last week that the Federal Reserve plans to acquire longer-term Treasuries also continued to affect the U.S. Dollar on worries that the policy could eventually lead to an oversupply of the currency.
Stock markets in European and Asia bourses opened higher because investors are pleased with the plans by Treasury Secretary to purge the banks of "toxic" assets. The government intends to spend about $75 to $100 billion and partner with the private investors to acquire the troubled assets.
The U.S Dollar fell against a group of major currencies (the U.S. Dollar Index or the .DXY) to 83.3 .DXY, as investors continue to support currencies, such as the Euro, Norwegian Crown and Australian Dollar, whose central banks’ interest rates are above zero and are not likely use quantitative easing in order to get their economies back on track.
The Japanese Yen also slipped to its lowest level in 5-months against the Euro, while the Euro rose by 0.4% against the U.S. Dollar and traded at $1.3644. The Pound Sterling gained 0.77% against the U.S. Dollar and traded at $1.4578. Versus the U.S. Dollar, the Aussie Dollar was the biggest gainer, up by 1.54% to $0.6971. The Euro rose by 1% against the Japanese Yen and traded at 131.54 Yen.