LONDON: The dollar was lower in late trade yesterday as players took profits on sharp gains made after the US government bailed out two key mortgage backers, helping ease concerns about the economic outlook.
Dealers said that after the takeover of Fannie Mae and Freddie Mac had seen sharp gains for the dollar and stocks on Monday, profit-taking and more cautious views on the move prevailed yesterday.
In late London trade, the euro rose to 1.4167 dollars from 1.4129 dollars late Monday in New York. Against the Japanese currency, the dollar fell to 107.49 yen from 108.27 yen on Monday. The yen found support as investors cut their exposure to risky bets despite the US government bailout of Fannie Mae and Freddie Mac over the weekend, dealers said.
Meanwhile, European stock exchanges wilted yesterday. In London, the FTSE 100 index was down 0.56 percent at 5,415.60 points at the close while in Paris the CAC-40 index lost 1.08 percent to 4,293.34 points. The Frankfurt the DAX shed 0.48 percent to 6,233.41 points. The Euro Stocks 50 index of leading euro zone companies fell 0.70 percent to close at 3,261.07. The euro traded at 1.4167 dollars. Asian stocks earlier yesterday fell sharply, with Taiwan leading the key decliners, tumbling 3.5 percent.
US stocks tumbled further yesterday. Shares of Lehman, the fourth largest US investment bank, fell 44 percent to $7.91 on the New York Stock Exchange.
The Dow Jones industrial average was down 198.18 points, or 1.72 percent, at 11,312.56. The Standard & Poor’s 500 Index was down 33.95 points, or 2.68 percent, at 1,233.84. The Nasdaq Composite Index was down 48.00 points, or 2.11 percent, at 2,221.76.
