Here is a blurb from Bloomsberg. Note the headline:

Dollar Advances as Paulson Seeks Stakes in Freddie, Fannie

Also, look at the quote (I've bolded and underlined it) from a bozo who actually thinks this is great news. I know it takes two to make a market so I guess you need these idiots.

stateside

By Stanley White

July 14 (Bloomberg) -- The dollar gained against the yen and snapped a three-day decline versus the euro after U.S. Treasury Secretary Henry Paulson asked Congress for the authority to buy shares of Freddie Mac and Fannie Mae.

The currency also erased earlier losses after the Federal Reserve said it will offer direct loans to the two largest U.S. mortgage finance companies, easing concerns that confidence in housing and financial markets will worsen. The New Zealand dollar fell as a government report showed retail sales slid by the most in more than four years.

``This should prove to be dollar supportive,'' said Sean Callow, senior currency strategist at Westpac Banking Corp. in Sydney. ``The notion of the Treasury buying stakes in Freddie Mac and Fannie Mae has got to be great for their share prices. That's a big step toward easing concern that these mortgage lenders can get access to funds.''

The dollar traded at $1.5910 per euro at 8:57 a.m. in Tokyo, from an earlier low of $1.5971 and $1.5938 in late New York on July 11. The U.S. currency reached a record low of $1.6019 on April 24. It bought 106.57 yen from 106.28 yen at the end of last week. The euro was little changed at 169.57 yen after earlier reaching 169.75, the strongest level since the single currency was introduced in 1999.

The dollar may rise to $1.5820 to $1.5830 today, Callow forecast.

The New Zealand dollar was the weakest among the 16 most- traded currencies as the retail sales report added to signs the economy has slipped into a recession. The currency traded at 76.00 U.S. cents from 76.14 on July 11 as retail spending slumped 1.2 percent in May after increasing the same amount in April.

Paulson Plan

Paulson proposed that Congress enact legislation giving the Treasury temporary authority to buy equity ``if needed'' in Fannie and Freddie, and to increase their lines of credit with the department from $2.25 billion each. The Fed authorized the companies to borrow directly from the New York Fed, in a step that could provide funding before the bill is passed.

Today's announcement came after Fannie Mae and Freddie Mac lost about half their value last week. Global banks and securities firms have reported losses of about $400 billion as the subprime mortgage market collapsed.

Against the Australian dollar, the U.S. currency advanced from a 25-year low of 97.16 cents reached July 11 to trade at 96.84 cents.

Futures traders decreased their bets that the euro will gain against the U.S. dollar, figures from the Washington-based Commodity Futures Trading Commission show.

The difference in the number of wagers by hedge funds and other large speculators on an advance in the euro compared with those on a drop -- so-called net longs -- was 24,007 on July 8, compared with net longs of 27,683 a week earlier.

Pimco and Euro

Bill Gross, manager of the world's biggest bond fund, turned bearish on the euro for the first time since the currency's inception in 1999.

A growing number of the world's biggest investors say a slowdown in the region's economy may be more severe than in the U.S., forcing the European Central Bank to reverse this month's rate increase. By January, the euro will be lower against the dollar, yen and even the pound, according to the median estimate of strategists surveyed by Bloomberg.

``We might have hit a point where the euro doesn't have a lot to stand on,'' said Emanuele Ravano, co-head of European strategy in London for Gross's Pacific Investment Management Co., which runs the $129 billion Pimco Total Return Fund. ``The euro is ultimately very overvalued. It could be quite a bit lower at some point in time over the next couple of years.''

To contact the reporter on this story: Stanley White in Tokyo at swhite28@bloomberg.net

Last Updated: July 13, 2008 20:08 EDT