Dollar gains as HSBC falls even more
HSBC is sliding down a well-lubed slope. The market just closed in Europe. Banks were the biggest sectoral losers, with Lloyds TSB slipping 11.7 percent, Commerzbank dropping 10.8 percent, BNP Paribas shedding 6.6 percent, HSBC down 7 percent and Barclays down 8.2 percent. HSBC leadership must feel like many of their customers who feel very helpless. It is interesting to note the volume of complaints at Household – HSBC Watch. More international complaints were received. The European Central Bank slashed its main interest rate by a half percentage point to 2 percent – but signaled it would slow the pace of future cuts – as it sought to protect the 330 million people in the 16 countries that use the euro against a deepening recession.
Strength of the dollar, pound sterling, and euro is an interesting study. The euro fell, approaching a five-week low against the dollar. The dollar also gained against the pound sterling. The Bank of England (BoE) cut Britain’s Interest Rates last week, which has led to the Dollar rally against the GBP. In the United states rates are so low there is no more room for cuts.
Regarding the fall of HSBC it is clear that U.S. operations will continue to report losses while a slumping world economy will not longer offset thsoe losses to the degree once seen.