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Last Updated: Thursday, 14 August, 2003, 22:36 GMT 23:36 UK
US blackout weakens dollar
The US dollar has weakened sharply as the lights went out in New York and other cities across North America's east coast.

But the US currency recovered after New York mayor Mike Bloomberg said there was no evidence that the blackout was caused by terrorism.

Against the euro, the dollar sagged to $1.130 to compared with $1.124 before the power cuts.

An hour and half later, it had strengthened to $1.1270.

The dollar also lost ground against the yen. Soon after the blackout, $1 was worth 118.90 yen compared with 119.10 yen before, but it was worth 119 yen again a couple of hours later.

Stocks already halted

The blackout robbed the New York Stock Exchange (NYSE) of power. But as it came shortly after the main US stock indexes closed for the day, share prices were undented.

The US financial system is extremely resilient
US Treasury spokesman

All New York's major stock markets, - the NYSE, Nasdaq and American Stock Exchange - said they would open as normal on Friday with the help of backup generators.

The US Treasury moved quickly to calm investors' nerves, stressing the impact on financial markets was likely to be minimal.

"The US financial system is extremely resilient," said Treasury spokesman Rob Nichols. "Power went down after the markets were closed. Our information is that market participants and exchanges were able to shut down in an orderly manner."

He added that the Treasury was "actively monitoring the situation" and was "in close touch with the financial regulators".

Traders soon regained their composure: "I think the market is realizing that it's a mechanical issue rather than a political issue," said Daniel Katzive of UBS Warburg.

The BBC's Justin Webb
"It appears this is not an act of terrorism"

Power failures hit US and Canada
14 Aug 03  |  Americas

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