Forex News and Rumors for October 9th, 2008

Fed offers AIG fresh $37.8bn injection

The move, which comes on top of the $85bn rescue loan that gave the government control of the company last month, is designed to help AIG fund its troubled securities lending operations.

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U.S. May Take Ownership Stake in Banks

Treasury officials say the just-passed $700 billion bailout bill gives them the authority to inject cash directly into banks that request it. Such a move would quickly strengthen banks’ balance sheets and, officials hope, persuade them to resume lending. In return, the law gives the Treasury the right to take ownership positions in banks, including healthy ones.

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Henry Paulson warns that more banks could collapse

Henry Paulson sounded a warning that “even with the new Treasury authorities, some financial institutions will fail”. The rescue scheme “doesn’t exist to save every financial institution for its own sake”, he added.
http://business.timesonline.co.uk/tol/business/industry_sectors/banking_and_finance/article4910392.ece
Iceland suspends trading after bank seizures

Iceland’s stock exchange on Thursday suspended trading in all shares citing unusual market conditions after the country’s largest lender, Kaupthing Bank, followed domestic peers into state ownership.

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S. Korea, Hong Kong, Taiwan Cut Rates, Joining Action

The Bank of Korea and Taiwan’s central bank lowered their rates by a quarter of a percentage point and Hong Kong cut its benchmark to 2 percent. The Bank of Japan, which kept its policy rate at 0.5 percent this week, pumped 2 trillion yen ($20 billion) into the financial system.

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Ireland extends deposit guarantee to foreign banks

Brian Lenihan, the Finance Minister, said he would extend the controversial €400 billion (£316 billion) guarantee scheme to foreign-owned banks with significant operations in Ireland

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza