In the Financial Papers: Today’s Top Forex News

August 16, 2007

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Ultimate weapon in Fed’s arsenal
The Fed has options other than continuing its current liquidity support operations or cutting interest rates. There are many intermediary steps. Possible actions include lengthening the maturity of its repurchase transactions in the money markets - for example, by making seven- or 14-day loans to banks rather than overnight loans on a daily basis.

Drama Turns Spotlight on ECB role
Unlike in other periods of tension – the aftermath of the September 11 2001 terrorist attacks, for instance – this time the ECB has taken the initiative, led by Jean-Claude Trichet, its president. As a result, the Frankfurt-based central bank, not yet a decade old, found its reputation under scrutiny.

Countrywide Taps $11.5 Billion Credit Line From Banks
“When a company draws on its bank lines, it just basically gives off the impression that it has run out of options,” said Christopher Wolfe, managing director at Fitch Ratings

Moody’s Warns of Potential LTCM-Scale Fund Collapse
Moody’s Investors Service warned that the global credit rout may cause a major hedge fund collapse on the same scale as Long-Term Capital Management LP in 1998.


US Housing Starts Drop to 10 Year Low
Builders in the U.S. started work on the fewest homes in a decade in July as the industry showed no sign of recovering from an 18-month recession.


Russia Joins in the Intervention
Russia’s central bank injected Rbs43.1bn into the country’s banking system on Thursday as Moscow battled the first symptoms of the global liquidity crunch spreading to its markets.

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