The dollar weakened against most major currencies yesterday following news of the possibility of General Motors Corp being declared bankrupt. The US Treasury directed GM to lay the groundwork for a bankruptcy filing by 1 June, which will ensure that the company is able to file bankruptcy if it cannot reach an agreement with bondholders to exchange roughly $28 billion in debt into equity in GM, and get needed concessions from the United Auto Workers union. This resulted in strengthening of the euro against the dollar. Nevertheless, trading was limited due to the Easter holidays.
Profit reports from the biggest US banks - including Citigroup Inc., J.P. Morgan Chase & Co. and Morgan Stanley are due this week, and could determine whether US stocks can continue on to five weeks of gains. Goldman Sachs announced earnings late yesterday as opposed to the expected release this morning, stating it was issuing $5 billion in stock to pay back government-bailout funds. Earnings in the first quarter rose to $3.39 a share, much higher than predicted.
There are several significant announcements taking place in the US today, including Producer Price Index, Retail Sales and the ABC/Washington Post Consumer Confidence survey. The Fed’s Stern will also be making a speech at 21.45 BST. There are no significant announcements taking place in the eurozone today.
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