Dollar gains despite rejection of bailout plan

NEW YORK, September 29, 2008 (AFP) – The euro and the pound slid against the dollar Monday after the rescue of several European banks deepened worries about the global financial system.

The currency market showed little reaction off US lawmakers’ rejection of a 700-billion-dollar financial rescue plan touted by President George W. Bush’s administration as vital to avert economic collapse.

The euro stood at 1.4432 dollars around 2100 GMT, down sharply from 1.4613 late Friday.

The pound dropped to 1.8068 dollars from 1.8452.

But the dollar weakened against the yen, trading at 104.03 yen against 105.95.

“The credit crisis has finally arrived in the heart of Europe,” said analysts at the French bank BNP Paribas.

News that authorities had mobilized in one form or another to shore up faltering European banks weighed heavily on both the euro and the pound.

On Sunday, Belgian-Dutch banking and insurance group Fortis was partially nationalized by Luxembourg, Belgium and The Netherlands, and German mortgage lender Hypo Real Estate was saved by a banking consortium and a government guarantee.

On Monday, the Icelandic bank Glitner was nationalized, while th