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October 31st 2005

Federal Indictment buoys USD

On Friday afternoon, Vice President Dick Cheney’s Chief of Staff, Scooter Libby, was officially indicted for the role he played in exposing the identity of an undercover CIA agent. While Libby immediately resigned his post in order to shield the Bush administration from further embarrassment, sufficient damage had already been dealt to the integrity of the administration. Nonetheless, forex markets reacted favorably to the news, sending the USD upwards. It seems currency traders were excited that the Vice President himself was spared, and they evidently felt the impact on the US economy would be negligible. However, if additional indictments are handed down in the next few days, expect the USD to reverse course. Reuters UK reports:

“There is still an element of doubt on whether there could be more charges of other White House officials…For the dollar it was the best outcome with just the one indictment of Libby,” said chief currency strategist at Scotia Capital.

Read More: Dollar rallies on strong US GDP, Libby indictment

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Posted by Adam Kritzer | in Politics & Policy, US Dollar | No Comments »

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