This Week: The Dollar, The Euro, The Yen and The Subprime Crisis

Filed Under Federal Reserve, Monetary Policy, Mortgage News, Mortgage Video, Subprime Implosion
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The European Central Bank’s president is playing down prospects of further interest rate increases. They raised their benchmark lending rate to 4.25%.

“The monetary policies stance after today’s decision, contributes to achieving our objective of price stability. We are never pre committed. It is a constant feature of our monetary policy. We do what is necessary to deliver price stability in the medium term and be credible and that delivery. Thursday’s 0.25% increase will help bring inflation back below 2%. We saw the little bit of a rebound, but that was chili weakness for the zero after this decision”.

With the US off for the July 4 holiday, he really is damping down prospects of further interest rate increases. Traders took that as a bad sign, by selling the Euro down to a one week low against the dollar.

Nobody much likes the pound because of the UK subprime crisis. The pound has really suffered. They are finding it an excuse to perhaps get back in at some kind of level.What is the general view on the yen? They are saying that it could push stronger. There are some concerns about subprime. Even though the economic news is bad and there is some inflation, they are saying that the yen can be stronger as the dollar is in a general downward spiral. Nobody is betting against that quite yet.

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