USD weaker on possible TARP paybacks by major banks

Story link: USD weaker on possible TARP paybacks by major banks

The US dollar weakened Tuesday on the possibility that major US banks have enough cash on hand after three major banks which have received US government bailout money were reported to be seeking to pay back those funds.

Reports say that Goldman Sachs (NYSE: GS), JPMorgan Chase (NYSE: JPM) and Morgan Stanley (NYSE: MS) have all applied to pay back the money they received through the Troubled Asset Relief Program.

The Federal Reserve must approve the repayments of TARP funds.

To date, no major banks have repaid the money, but 14 smaller banks have already given back they TARP money they received.

In late morning trade in New York, the greenback traded at $1.36 to the euro while the yen traded at ¥96.16 to the dollar and at ¥130.7766 to the euro.

The US briefly made back some of its declines versus the euro after a report from the Commerce Department showed that US housing starts were down 13 percent overall and fell 46 percent for starts of apartments and condominiums in April over March’s numbers.

The pound, meanwhile, strengthened on better-than expected profits reports from financial services group ICAP (LSE: IAP) and retailer Marks & Spencer Group (LSE: MKS), raising hopes that the UK economy will soon recover from its recession.

At just before 11:30 a.m. in New York, the pound traded at 87.72p to the euro while it took $1.5504 to buy a pound.