The dollar fell against most major currencies on Monday as the U.S. government's plan to bailout Citigroup boosted confidence in financial markets.
The government said the U.S. Treasury and the Federal Deposit Insurance Corporation will guarantee more than 300 billion dollars of Citigroup's assets and invest an additional 20 billion dollars on top of the 25 billion dollars already part of the government's 700 billion dollars bailout program passed by Congress in October.
Citigroup's stock jumped 58 percent after dropping 60 percent last week. Other financial giants like JP Morgan Chase & Co., Bank of America Corp and Goldman Sachs jumped more than 21 percent sending the S&P 500 up to a record gain.
U.S. President George Bush said Monday that the bailout of Citigroup was necessary help to get the economy back on its feet. "We have made these kinds of decisions in the past," Bush said in Washington in a brief statement with Treasury Secretary Henry Paulson. "We made one last night. And if need be we will make these kinds of decisions to safeguard our financial system in the future."
The dollar fell against high-yielding currencies as the bailout plan boosted risk appetite in currency trading. Market confidence was also boosted as President-elect Barack Obama confirmed his economic team. New York Federal Reserve Bank president Timothy Geithner will become Treasury Secretary. Lawrence Summers, a former treasury secretary under President Bill Clinton, will be director of the National Economic Council.
The euro bought 1.2877 dollars in late New York trading compared with 1.2502 dollars it bought late Friday. The pound rose to 1.5115 dollars from 1.4777 dollars.
The dollar fell to 1.1988 Swiss francs from 1.2243 Swiss francs, and rose to 96.85 Japanese yen from 95.37 Japanese yen. It fell to 1.2377 Canadian dollars from 1.2873 Canadian dollars.
Also on Monday, Wall Street posted the largest two-day rally since 1987 after the government rescued Citigroup late Sunday night.
The Dow Jones average rose 396.97, or 4.93 percent, to 8,443.39. The Standard & Poor's 500 index advanced 51.78, or 6.47 percent, to 851.81, and the Nasdaq composite index rose 87.67, or 6.33 percent, to 1,472.02.
(Xinhua News Agency November 25, 2008)
