Forex - US dollar edges higher vs major currencies after overnight slide

Forex - US dollar edges higher vs major currencies after overnight slide

	Published : Tue, 27 Nov 2007 00:26 By : Agencies Print this Story

SYDNEY (Thomson Financial) - The US dollar was higher against major currencies in midmorning trade in Sydney Tuesday after falling overnight as the Dow shed nearly 2 percent due to ongoing concerns about credit and financial markets.

The greenback weakened against the euro, sterling and yen as the Dow Jones Industrial Average fell 237.44 points in response to more bad news from Citigroup and HSBC Holdings.

Citigroup Inc, which is facing big credit-related losses in the fourth quarter, announced plans to

lower costs which could mean job cuts, and HSBC said it will spend 35 billion US dollars bailing out

two funds.

In addition, UBS downgraded government-backed mortgage lenders Fannie Mae and Freddie Mac due to credit pressures and Citigroup reduced its outlook for several major homebuilders.

''A drop in US equity markets late in the afternoon prompted a mass liquidation of yen carry trades, knocking all primary crosses lower, and taking US dollar/yen down to fresh session lows into the close,'' said Peter Whitley, an analyst at Thomson IFR.

At 10.12 am (2312 GMT), one US dollar was buying 107.43 yen compared with 107.32 yen in late New York trade.

The euro was lower at 1.4868 dollars from 1.4878 dollars overnight and the sterling was doing 2.0697 dollars, down from 2.0713 dollars.

Elsewhere, the high-yielding Australian dollar was worth 87.01 US cents after closing at 86.93

cents last night as the plunge in US shares eroded the market's appetite for risky investments.

Further falls could be on the way for the commodities-backed currency.

''While credit market/liquidity and US recession concerns persist, Australian dollar risks are to the downside,'' said John Kyriakopoulos, head of currency strategy at National Australia Bank.

''We would be watching metal prices in Asia today, with any significant fall putting pressure on the Australian dollar.''

Sydney 10.12 am (2312 GMT)

US dollar

107.43 yen

1.097 sfr

Euro

1.4868 usd

159.745 yen

1.6311 sfr

0.7184 stg

Sterling

2.0697 usd

222.338 yen

2.27055 sfr

Australian dollar

0.8701 usd

0.4203 stg

93.44 yen

New Zealand dollar

0.7509 usd

allison.jackson@thomson.com

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