- Pre-Market Indications

Monday, March 17, 2008

Dollar Plumbs New lows Despite Fed Action -

Dollar Plumbs New lows Despite Fed Action

The dollar plunged across the board on Monday as new liquidity-boosting measures launched by the Federal Reserve over the weekend failed to assuage worries about the health of the U.S. banking sector.

The Federal Reserve took more emergency measures to stem the fast-spreading financial crisis, cutting its discount rate on Sunday and opening up discount window lending to major investment banks, a tool not used since the Great Depression.

But the moves did not stop the dollar from sliding as much as 3 percent in early Monday trading to below 96 yen, its lowest since 1995 and bringing year-to-date losses to 13 percent.

"The markets are in a complete state of panic and in such a situation there is no such thing as valuation or value in any asset, so we are seeing indiscriminate selling across the board... Given that the U.S. is the origin of the overall crisis clearly this is hitting the dollar hard," said Michael Klawitter, FX strategist at Dresdner Kleinwort in Frankfurt.

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