Saturday, September 27, 2008

Dollar under pressure

The dollar drifted lower in Asian trade Friday as political wrangling held up a proposed Wall Street bailout plan, dealers said.

The dollar slipped to 105.92 yen in Tokyo morning trade from 106.53 in New York late Thursday. The euro firmed to 1.4670 dollars from 1.4608 but eased to 155.49 yen from 155.65.

Markets were waiting impatiently for US Congress to pass the much debated$ 700 billion financial sector rescue package.

Hopes that a deal was imminent faded after top lawmakers from the two parties failed to clinch a deal in key talks at the White House.

"The plan's contents are unclear and markets are uncertain how it's going to play out," said Kenichi Yumoto, vice president of forex sales at Societe Generale.

Congress has been bickering over the proposal, with Democrat lawmakers trying to add amendments that would help troubled US mortgage owners while Republicans are opposing the slashing of Wall Street executives' pay cheques.

"Investors will be waiting to see the extent to which the original package has been watered down, potentially reducing its effectiveness in reviving lending and credit markets," NAB Capital strategists wrote in a research note.

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