panel banks

Suggestion by 195.64.172.5 on 2009-06-10 11:47:06

panel banks

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6 Month LIBOR(JPY)

Suggestion by 211.121.189.130 on 2009-05-29 04:21:47

6 Month LIBOR(JPY)

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historic libor

Suggestion by 145.248.195.1 on 2009-05-13 08:02:53

historic libor

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daily libor

Suggestion by 24.120.255.100 on 2009-02-10 00:10:08

daily libor

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Libor Rates at a Glance...

Suggestion by 66.245.19.183 on 2008-10-28 17:51:50

Libor Rates at a Glance http://forbestadvice.com/Real-Estate/BestMortgageRate/LiborRatesGlance.html

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libor GBP

Suggestion by 192.54.193.58 on 2008-10-28 08:30:12

libor GBP

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1 yr. libor rate

Suggestion by 205.188.117.10 on 2008-10-17 13:08:06

1 yr. libor rate

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how do I use the LIBOR rate to follow the confidence of foreign investor...

Suggestion by 71.7.116.222 on 2008-09-16 15:31:26

how do I use the LIBOR rate to follow the confidence of foreign investors have in the US dollar? how do I find and How do I use the LIBOR to the 90 T bill?

Using LIBOR to follow investor confidence on currency

There are different LIBOR rates for different currencies. This is because investors have different level of confidence on each of the currencies. Relatively higher LIBOR rate for a currency suggests that the investor is expecting the currency to decline in value against other currencies, as a result they are demanding excess return (through higher LIBOR rate on that currency). You have to compare the US dollar LIBOR against LIBOR on other currencies to get a sense of it.

In general, if the US LIBOR rate has increased at a faster pace than LIBOR rates on other currencies then you could reasonably say that the confidence on the US dollar is decreasing. Keep in mind that value of the value of dollar depends on relative inflation in a country, and therefore the LIBOR rate, intrinsically, represents inflation expectations.

Historically, the LIBOR rate has been higher than the rate on T-bill (http://www.earlywarningwire.com/3%20mo.liborvs.3%20mo.t-bill.pdf). This is because US government bonds are considered to be less risky than loans to banks. However, the spread between the 90 day T-bill and 90-day LIBOR can give us a sense of confidence in the US dollar. When confidence on the dollar is high the spread will be very thin. This is because if the investor buys a 90-day T bill, in addition to getting an interest on it, he expects to benefit from the rising dollar. Conversely, if confidence is low the spread will be higher.

LIBOR rates can be found on Bankrates.com and T-bill rates can be found on Bloomberg.com.

Posted by Walim 12:04, September 17, 2008 (PDT)

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