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| Version 1 | Version 2 |
|---|---|
| World markets jittery on US woes | World markets jittery on US woes |
| (about 4 hours later) | |
| Global share prices continued their volatile trading, after US stock indexes fell overnight amid fears for the US economy and a fragile dollar. | |
| The UK's FTSE 100 index fell in early trading, before rebounding and climbing 27 points, or 0.4%, to 6,097.90. | |
| Earlier on Wall Street, the Dow Jones index slumped by more than 200 points prompting nervous trading in Asia, and a slide in Germany and France. | |
| Analysts said that markets probably would be jittery in coming months. | Analysts said that markets probably would be jittery in coming months. |
| US markets are closed for Thanksgiving on Thursday. | US markets are closed for Thanksgiving on Thursday. |
| Rate cut? | Rate cut? |
| The worry for many investors is that problems in the US housing market, coupled with higher interest rates and a global credit crunch, will spread to the wider economy, slowing annual growth. | The worry for many investors is that problems in the US housing market, coupled with higher interest rates and a global credit crunch, will spread to the wider economy, slowing annual growth. |
| Market expectations of a further rate cut were buttressed by a Tuesday statement from the Federal Reserve which lowered its growth forecast for next year, underpinning the fears of a slowdown. | Market expectations of a further rate cut were buttressed by a Tuesday statement from the Federal Reserve which lowered its growth forecast for next year, underpinning the fears of a slowdown. |
| The US central bank now sees the economy growing by between 1.8% and 2.5% in 2008, compared to its previous forecast of between 2.5% to 2.75%. | The US central bank now sees the economy growing by between 1.8% and 2.5% in 2008, compared to its previous forecast of between 2.5% to 2.75%. |
| We just can't seem to break free of the financial concerns that are out there Bucky Hellwig, Morgan Asset Management | We just can't seem to break free of the financial concerns that are out there Bucky Hellwig, Morgan Asset Management |
| The changed forecast sent shares lower around the world, with Japan's Nikkei index closing up 0.3% at 14,888.77 points - having earlier touched a 16-month low - as the yen weakened slightly against the dollar. | The changed forecast sent shares lower around the world, with Japan's Nikkei index closing up 0.3% at 14,888.77 points - having earlier touched a 16-month low - as the yen weakened slightly against the dollar. |
| At the same time, the outlook for the US currency remains weak amid speculation that US interest rates will have to fall to stimulate growth. | At the same time, the outlook for the US currency remains weak amid speculation that US interest rates will have to fall to stimulate growth. |
| Cutting interest rates tends to weaken a currency as investors shift their money to countries and regions where they can get a higher rate of return. | Cutting interest rates tends to weaken a currency as investors shift their money to countries and regions where they can get a higher rate of return. |
| The dollar touched a record low of $1.4873 against the dollar on Thursday, and also fell against the Japanese yen. | The dollar touched a record low of $1.4873 against the dollar on Thursday, and also fell against the Japanese yen. |
| "We are looking for continued dollar weakness and would not be surprised to see the euro break $1.50 within weeks rather than months," said Teis Knuthsen, head of currency research at Danske markets in Copenhagen. | "We are looking for continued dollar weakness and would not be surprised to see the euro break $1.50 within weeks rather than months," said Teis Knuthsen, head of currency research at Danske markets in Copenhagen. |
| "Primarily, it is still the relative economic development between the US versus the rest of the world, combined with the ongoing financial crisis, which is heavily concentrated in the US," he added. | "Primarily, it is still the relative economic development between the US versus the rest of the world, combined with the ongoing financial crisis, which is heavily concentrated in the US," he added. |
| Financial jitters | Financial jitters |
| In the US on Wednesday, the worries saw the Dow Jones index drop 211.1 points, or 1.6%, to 12,799, while the Nasdaq fell 1.3%, or 34.7, to 2,562.2. | In the US on Wednesday, the worries saw the Dow Jones index drop 211.1 points, or 1.6%, to 12,799, while the Nasdaq fell 1.3%, or 34.7, to 2,562.2. |
| "We just can't seem to break free of the financial concerns that are out there," said Bucky Hellwig, of Alabama-based Morgan Asset Management. | "We just can't seem to break free of the financial concerns that are out there," said Bucky Hellwig, of Alabama-based Morgan Asset Management. |
| "The unwinding of the real estate and the mortgage market continues to weigh on investor concerns." | "The unwinding of the real estate and the mortgage market continues to weigh on investor concerns." |
| The continuing dollar and share weakness has been sparked by the US mortgage debt crisis, which has led to a growing number of American banks revealing multi-million dollar losses. | The continuing dollar and share weakness has been sparked by the US mortgage debt crisis, which has led to a growing number of American banks revealing multi-million dollar losses. |
| As worries over the economy continued, investors turned to the safety of government securities. | As worries over the economy continued, investors turned to the safety of government securities. |
| Yields on Japanese 10-year bonds fell to their lowest rate in two years. Earlier, the yield on the US Treasury's 10-year note fell below 4% for the first time since 2005. | Yields on Japanese 10-year bonds fell to their lowest rate in two years. Earlier, the yield on the US Treasury's 10-year note fell below 4% for the first time since 2005. |