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Dollar, Treasuries dip after Citigroup results

Fri, 01/16/2009 - 22:01 — admin

Dollar_Treasuries_dip_after_Citigroup_resultsLONDON, Jan 16 (Reuters) - The dollar briefly trimmed gains against the yen and U.S. Treasury futures fell on Friday after ailing U.S. financial giant Citigroup Inc (C.N) reported a bigger-than-expected loss in fourth quarter earnings.

Citigroup reported a fourth quarter net loss of $8.29 billion, or a loss per share of $1.72 compared with forecasts for a loss of $1.32. [nWNAB0562]

Separately, Bank of America Corp (BAC.N) also reported a fourth quarter loss per share of $0.48, hours after winning a $20 billion lifeline from the U.S. government to help it absorb Merrill Lynch & Co. [nWNAB0566]

The dollar briefly dipped to near 90.45 yen <JPY=> from around 90.60 yen shortly before the release.

"The combination of the two earnings releases just underline yet again, if it was required, the scale of the problems facing the global banking sector," said Jeremy Stretch, markets strategist at Rabobank in London.

"The post BoA (bailout) optimism has seemingly been trimmed a little bit, but there's probably a reluctance to chase the market too much lower today," he added.

Yields on U.S. Treasury bonds briefly eased before a resumption of the day's trend extended Treasuries futures' losses to more than a full point on the day.

The March Treasury future TYc1 fell as low as 125-61/64 TYc1, down over a point on the day.

At 1115 GMT the yield on two-year U.S. Treasury bonds was up 4 basis points on the day at 0.76 percent <US2YT=RR>, up slightly from just before the results. The 10-year yield was 11 basis points higher on the day at 2.31 percent <US10YT=RR>, up a basis point from just before the banks' results.