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The dollar declined against a majority of the most-traded currencies as Brazil and Russia joined China in saying they would shift some $70 billion of reserves from U.S. Treasuries into multicurrency bonds.

The drop in the U.S. currency was the third weekly slump in four against the euro as concern increased that record debt sales and deficits will erode the value of the dollar. The British pound touched the strongest level since December versus the euro, after reports showed U.K. manufacturing rose in April, while the decline of housing prices slowed.

The dollar also declined as traders reduced their bets that the Federal Reserve will start raising its benchmark interest rate from a range between zero and 0.25 percent. Interest-rate futures yesterday indicated a 20 percent chance the Fed will boost its target rate for overnight lending between banks to at least 0.5 percent by its September meeting, compared with 49 percent odds a week earlier.

The dollar weakened after the Russian central bank’s first deputy chairman, Alexei Ulyukayev, said on June 10 that the nation Russia may switch reserves from Treasuries to International Monetary Fund bonds. Brazil’s Finance Minister Guido Mantega said his country will purchase $10 billion.

Leaders of Brazil, Russia, India and China, the so-called BRIC countries, are scheduled to meet on June 16 in Russia to discuss their economies.

Central banks’ dollar-selling may help weaken the greenback beyond $1.50 per euro before September, according to Thomas Stolper, a London-based economist at Goldman Sachs Group Inc. Goldman on June 9 advised its clients to buy the euro versus the dollar.

The dollar pared its weekly losses yesterday after Japanese Finance Minister Kaoru Yosano said his nation’s confidence in U.S. debt is “unshakable” and that the currency’s global status is safe.  Japan is the second-biggest foreign holder of Treasuries after China.
Source: bloomberg.com

Bank of America Corp., Citigroup Inc., Wells Fargo & Co. and GMAC LLC are among the companies judged to need additional capital according to results of regulators’ stress tests on the 19 largest U.S. banks.

Bank of America has the biggest shortfall, at $34 billion. Citigroup’s requirement for deeper reserves to offset potential losses over the coming two years is about $5 billion. Wells Fargo requires about $15 billion, while GMAC’s need is $11.5 billion.

Goldman Sachs Group Inc., Morgan Stanley, MetLife Inc., JPMorgan Chase & Co., Bank of New York Mellon Corp. and American Express Co. were deemed not to need additional funds, the results show.

U.S. stocks declined, as concern grew that credit losses are worsening. Bank of America Corp., tumbled 13 percent as rising charge-offs for uncollectible loans overshadowed better-than-estimated earnings. Citigroup Inc. dropped after Goldman Sachs Group Inc. said the bank’s credit losses are growing at a “rapid rate.” Although Citigroup posted first-quarter net income of $1.6 billion last week, it suffered an “underlying” loss of 38 cents a share.

November 2008 – Billionaire Warren Buffett’s Berkshire Hathaway Inc. posted a fourth straight profit drop, the longest streak of quarterly declines in more than a decade, as hurricanes hurt returns at insurance operations and investments lost value. Hurricanes Ike and Gustav cost insurers a combined $10 billion when they struck the Gulf Coast in September, according to preliminary data from Insurance Services Office Inc. Although losses has been significant, Buffett committed at least $28 billion this year to acquire companies, finance buyouts and purchase securities. In the past two months, he agreed to spend $5 billion of Berkshire’s cash for a stake in Goldman Sachs Group Inc., and another $5 billion in preferred shares of General Electric Co.

He also agreed in July to lend $3 billion to Dow Chemical Co. to help fund that firm’s takeover of Rohm & Haas Co., and committed $6.5 billion in April to help Mars Inc. buy chewing gum maker Wm. Wrigley Jr. Co. Berkshire’s MidAmerican Energy Holdings Co. struck a deal in September to pay $4.7 billion for Constellation Energy Group Inc.

Sheldon Adelson’s casino company, fell the most in New York trading since going public after saying it may default on debt and face bankruptcy. He said that it probably won’t meet the requirements of loans unless it cuts spending on developments, boosts earnings at its Las Vegas Strip casinos and raises more capital.

The shares dropped $3.81, or 33 percent, to $7.85 at 4:04 p.m. in New York Stock Exchange composite trading, the biggest decline since its initial share sale in December 2004. Las Vegas Sands had tumbled 91 percent before November 2008 as investors dumped the stock, worried that falling casino winnings and the global financial meltdown would leave the company without enough cash.