USD not helped by official comments

Worries about the fate of Fannie Mae (NYSE: FNM) and Freddie Mac (NYSE: FRE), the two biggest mortgage lenders in the United States, hurt the US dollar and had further effects among global currencies Friday even though US government officials, including Treasury Secretary Henry Paulson, insisted that all their efforts are going toward making sure the two lenders continue to do business in their current configuration.

The greenback was also hurt as crude oil prices rose to a new record over $147 per barrel on continuing geopolitical concerns and on worries about a strike in Brazil.

The US dollar fell as far as $1.5847 to the euro and was trading at $1.5887 to the euro at just past 2 p.m. in New York while at the same time it took ¥106.2700 to buy a dollar.

The Australian and New Zealand dollars strengthened versus the US dollar on speculation that worries about the mortgage lenders mean that the US Federal Reserve will not raise interest rates in the foreseeable future.

The Aussie, also aided by gains in commodities prices, was worth 96.57 cents US while it took 76.09 cents US to buy a New Zealand dollar.

The South African rand, hurt by risk avoidance in which the troubles for US mortgage lenders was a factor, traded lower at R12.216 to the euro but was a bit higher versus the greenback at R7.6885 to the dollar.

Story link: USD not helped by official comments