Dollar falls to record low vs euro on Bear Stearns, credit market woes
Posted by: in Stocks Money NewsFiled under: Economic data, Federal Reserve
The dollar fell to a yet another record-low against the euro Friday and plunged against the world’s other major currencies, as investors shunned U.S. investments ahead of an almost-certain U.S. recession, with likely further interest rate reductions from the U.S. Federal Reserve.
Friday’s trigger event for selling was The Bear Stearns Companies, Inc. (NYSE: BSC) stunning announcement that — less than 10 days after senior management officials called liquidity-crunch rumors ‘absolutely ridiculous’ — it had accepted a 28-day, emergency, secured loan from the U.S. Federal Reserve via JP Morgan Chase & Co. (NYSE: JPM).
The Fed said in a statement that it will “continue to provide liquidity as necessary to promote the orderly functioning of the financial system,” repeating reassurances Federal Reserve Chairman Ben Bernanke has made often since credit problems first surfaced in August 2007. The Fed did not state how large their loan is to Bear Stearns.
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