Forex News and Rumors for September 16th, 2008

Fed Leaves Key Lending Rate at 2%

The Federal Reserve decided that inflation concerns were more pressing that current financial instability and kept the 2.00% Federal Funds Rate unchanged.

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Alt A Mortgages Coming Home to Roost

Alt A mortgages – high-risk mortgages offering low introductory interest rates requiring little in the way of proof of employment – are poised to add to the current U.S. housing woes. Like the subprime mortgages, Alt A loans were bundled into collateralized debt obligations – effectively hiding the true nature of the loans – and were then resold.

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Crude Continues to Fall as Wall Street Braces for More Bad News

Crude fell to $91 a barrel on worries that the U.S. banking crisis could spill over into the global economy.

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AIG Suffers Ratings Cut

American International Group Inc. fell by 38% to $2.97 and had its credit rating cut by both Standard & Poor’s and Moody’s. The ratings reduction will make it even more difficult for AIG to raise the funds it needs to remain solvent.

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Loonie Continues to be Hammered as Crude Prices Fall

Forecasters suggest the Canadian dollar could fall to $1.12 – a drop of more than four cents – against the U.S. by the end of next year.

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