Dollar down as concerns over US financial system mount
The US dollar slumped today, boosting the Yen to its largest daily gain in nearly six years as concern mount over the strength of the US financial system. The slump came after the fourth largest US bank Lehman Brothers failed to secure a rescue deal over the weekend and today announced it will be filing for bankruptcy.
The euro stalled from making large gains against the dollar, as investors worry that the US financial problems will filter into Europe.
Over the weekend, Merrill Lynch another US bank suffering from financial problems brokered a takeover deal with the Bank of America, with the Federal Reserve announcing that it will accept stocks for cash loans to try to stabilise the market.
Many analysts are speculating that the Federal Reserve will also cut interest rates again, when they meet for their standard policy meeting tomorrow.