Forex News: Dollar near all time low vs euro as investors weighed ramifications of government plan to rescue battered mortgage giants Fannie Mae, Freddie Mac. News that Treasury Department would consider taking equity stake and Fed said offering them direct loans at discounted rate spawned worries that smaller, regional mortgage banks might not be so fortunate. Government plans for Fannie Mae, Freddie Mac are "no panacea and, of course, they serve only to plug the latest 'leak' in the U.S. financial system," said FX strategist Neil Mellor at Bank of New York Mellon. Late Monday in New York EUR/USD 1.5910 vs 1.5931 late Friday, USD/JPY at 106.13 vs 106.34, EUR/JPY 168.86 vs 169.38, GBP/USD 1.9945 vs 1.9875, USD/CHF 1.0165 vs 1.0158. Stocks fell on renewed worries about bank failures.
After an early bounce Freddie Mac fell 8.3%, Fannie Mae down 5.1%; Washington Mutual fell 35% after Lehman Brothers said it could see losses of as much as $26 billion on mortgages, other items on balance sheet. Dow down 0.4%, Nasdaq down 1.2%, Philly Semicons off 0.8%. Treasurys rebounded from early selloff on banking sector fears; 2-year yield down 13.9 bps at 2.47%, 10-year down 7.5 bps at 3.87%. Nymex August crude closed up 10 cents higher at $145.18/ bbl as a labor strike bottled up 7% of Brazil's petroleum output. Comex August gold rose $13.10 to $973.70/oz on safe-haven buying given troubled financial markets, weakening USD.
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