On Thursday the USD edged higher against the EUR and the JPY in volatile trading, driven by expectations that the US government was nearing a deal on the $700 billion bailout package. But in the early Friday session the USD fell against these currencies after a White House meeting with congressional officials was unable to produce an agreement over the bank rescue plan. After the convention, they said an agreement could last until the weekend. This sent US stock futures down sharply in Asia trading and hurts the Greenback.
Gold steadied on Friday after three days of losses, but uncertainty about the future of a deal to rescue the U.S. financial system, which had appeared close to an agreement, drove investors to the sidelines. Spot gold was quoted up at $877.25/879.25 per ounce by 0305 GMT, compared with the previous nominal close of $875.70.
The dollar slid against the yen and the euro on Friday as a deal to rescue the U.S. financial system stalled, souring hopes for an imminent agreement to resolve the banking crisis.
Oil fell more than $3 to $105 a barrel on Friday, wiping out the previous session’s gains, after talks between U.S. lawmakers over a bailout package to mop up toxic debt stalled.
Sterling buckled against the low-yielding Japanese yen on Friday, with investors cutting exposure to higher yielding currencies as the U.S. Treasury’s proposed $700 billion bank bailout package ran into trouble.
