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US dollar sharp fall on Hedge Fund Bear Stearns Losses

Posted by Adrian on July 18, 2007

This time the fall of the US dollar is due to the ever increasing problem in the subprime mortgage market – as it continues to collapse.

Hedge Funds are a type of fund manager that takes ‘risks’ from various financial asset products. In the Case of Bear Stearns, they took ‘bets’ on the performance of risky mortgages, ala subprime. Now with the Subprime market in widespread meltdown. Big Hedge Funds like Bear Stearns are now bearing the brunt of the massive losses incurred. This in turns effects the stock market and the overall economy in the US. Everything now becomes somewhat risky, including their slowly depreciating USD.

Currency update:

USD-JPY 121.8350 -0.5050 -0.41
USD-HKD 7.8206 0.0001 0.00
USD-SGD 1.5178 0.0002 0.01
AUD-USD 0.8751 0.0025 0.29
     

Hedge Fund info here

Bloomberg article on Bear Stearns losses and it’s possible effect on the USD here

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