The Dollar fell broadly on Thursday as worries of wider credit-related losses at some US financial firms made investors abandon risky trades, starting a rally in the Yen and Swiss Franc. They tend to attract flows during periods of uncertainty as the low interest rates reflect the capital surplus of their respective countries.
Worries over the US financial sector were back on investors' radar screen, with Citigroup cutting its Q3 earnings estimates for Lehman Brothers. It also lowered estimates for Goldman Sachs Group, Merrill Lynch & Co Inc, and Morgan Stanley, citing expected losses on hard-to-sell assets and lower client trading volumes.
ECB policymaker Klaus Liebscher said on Thursday that euro zone growth was expected to come in at the bottom end of expectations this year but an all-out recession in the region was highly unlikely.
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