Monday, April 27, 2009

Dollar mixed amid economic jitters

Dollar mixed amid economic jitters

Typical safe haven currencies show strength as investors fret over the scope of the global flu outbreak. Mexican peso sinks against the dollar.

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By Catherine Clifford, CNNMoney.com staff writer

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NEW YORK (CNNMoney.com) -- The dollar rallied against the Mexican peso and was mixed against other major currencies Monday amid worries about the economic impact of a global swine flu outbreak.

Because Mexico appeared to be at the heart of the outbreak, that country's currency took a beating. The dollar surged 4.8% against the peso, buying 13.98 pesos, up from 13.34 late Friday. The dollar hit a high of 13.99 in the session.

The World Health Organization (WHO) said Monday that there were 73 confirmed cases of swine flu across the globe and declared a public health emergency. About 40 cases were identified in the United States.

Investors are concerned that the epidemic could slow the economic recovery, pushing investors to move funds into perceived safe havens, such as the dollar and the yen.

The greenback edged 0.5% lower against the Japanese yen, another major currency that typically rallies in times of economic uncertainty. The dollar bought ¥96.73, down from ¥97.17 late Friday.

In other currencies, the 16-nation euro traded at $1.3044, down 1.5% from Friday's close of $1.3242. The British pound also slipped against the dollar, trading at $1.4656, down 0.1% from $1.4675 late in the day Friday.

The dollar was also finding some support from weakness on Wall Street.

All three major stock market indexes ended lower Monday afternoon in a choppy session as investors weighed the flu outbreak against news of GM's restructuring and Chrysler's deal with its union.

The fate of the U.S. automakers has been under close watch lately, with the clock ticking for both.

Chrysler won key concessions in a tentative deal with the United Auto Workers, and General Motors (GM, Fortune 500) unveiled a restructuring proposal Monday as part of its effort to avoid bankruptcy. Chrysler still needs to reach two critical deals by Thursday to avoid bankruptcy.

Meanwhile, GM has until the end of May to reach deals with creditors and unions to cut costs or be forced into bankruptcy.

Quake strikes near Acapulco, Mexico

MEXICO CITY, Mexico (CNN) -- A moderate quake measuring 5.6 in magnitude struck southwestern Mexico near the resort city of Acapulco on Monday, according to the U.S. Geological Survey.

USGS measured the quake's epicenter in the state of Guerrero about 43 miles northeast of Acapulco.

Authorities in Acapulco evacuated hotels there, although there were no reports of damage, according to CNN affiliate TV Azteca

First papal visit for Charles since divorce

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LONDON, England (CNN) -- Prince Charles visited the Vatican on Monday for his first meeting with a pope since his 1996 divorce from Princess Diana.

Pope Benedict XVI is flanked by Prince Charles and his wife Camilla during their meeting at the Vatican.

Pope Benedict XVI is flanked by Prince Charles and his wife Camilla during their meeting at the Vatican.

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The heir to the UK throne was accompanied by his second wife, Camilla, the Duchess of Cornwall, who wore the mandatory modest black dress and veil which the Vatican requires for wives of dignitaries who meet the pope.

The 20-minute meeting was "cordial," the Vatican said in a statement afterwards.

Prince Charles's accession to the throne was likely to be an unspoken subtext of the meeting, an expert on the prince told CNN.

"The biggest thing on Prince Charles's agenda is the preparation for his coronation," said Christopher Wilson, author of "The Windsor Knot: Charles, Camilla and the Legacy of Diana."

Charles would like the pope to attend personally, unlikely as that may be, given the religious divide between London and Rome, Wilson said.

"He will expect a high-profile Roman Catholic presence in Westminster Abbey," where he will be crowned, Wilson argued. "The combined heads of state come from everywhere. Every democratically elected head of state will be invited. It bigs up your coronation if you can get the highest Roman Catholic to come."

The meeting between prince and pope came days after the 500th anniversary of the crowning of Henry VIII, the English king who broke with the Roman Catholic Church and established the Church of England because he wanted to divorce.

It was Prince Charles's first visit to the Vatican since he went to the funeral of Pope John Paul II four years ago, and his first meeting with a head of the Roman Catholic Church since 1985.

There are multiple factors complicating his relationship with the Vatican, Wilson pointed out. Not only is he divorced, which the Roman Catholic Church disapproves of, but so is Camilla -- and her children are being raised as Catholics because their father is one.

A centuries-old British law forbids Catholics or their spouses from holding the throne.

The Prince of Wales "is trying to break down the breach between the Vatican and the House of Windsor," Wilson said. "It's a path-smoothing exercise."

Additionally, he said: "Prince Charles likes very much to be photographed with heads of state. He's not the head of state himself. It adds luster to his royal presence."

Charles and the pope were expected to discuss issues such as interfaith dialogue and climate change -- subjects to which Prince Charles has devoted himself.

The pair exchanged gifts. Benedict gave Charles a gold pontifical medal and an antique engraved copper plate of St. Peter's Basilica dating from the 16th century. Charles gave Benedict a set of 12 porcelain plates with floral design of the plants and flowers that grow at his country estate in Gloucestershire.

Afterwards, Prince Charles met Vatican Secretary of State Cardinal Tarciso Bertone and Vatican foreign affairs minister Archbishop Dominique Mamberti, while Camilla received a private tour of the Sistine Chapel.

Charles and Camilla are on a tour of Italy and Germany at the request of Britain's Foreign Office, Clarence House said.

The European Union director of the Foreign and Commonwealth Office, Matthew Rycroft, cited "the prince's personal passion and personal engagement over the years on the issue of climate change" as a major reason for the trip, a Clarence House statement said.

Taliban suspends regional peace talks

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ISLAMABAD, Pakistan (CNN) -- Taliban militants have suspended talks with the provincial government in the midst of fighting in the country's volatile northwestern region.

Pakistani soldiers on patrol in Buner district.

Pakistani soldiers on patrol in Buner district.

"Due to the military operation in Lower Dir ... we have decided to suspend dialogue with the (North West Frontier Province) government," Amir Izad, a spokesman for Tehreek Nifaz-e-Shariat Mohammadi (TNSM), a Taliban-aligned group, said Monday.

This comes after Pakistan's Frontier Corps launched an offensive against suspected militants and their hideouts in Lower Dir, which neighbors the violence-plagued Swat area.

The TNSM lost contact with Sufi Muhammed, an Islamist fundamentalist leader who has been negotiating on behalf of the Taliban, on Sunday, Izad said.

"We have not been able to get any information about his whereabouts, make contact with him, or his family," according to Izad. "We will not restart the dialogue until these operations stop."

The suspected militant hideouts targeted by the military are in Islampura and Lal Qila in Lower Dir. A "heavy exchange of fire" was reported at Kala Dag and Lal Qila, the Pakistani military said Sunday.

There were reports of many Taliban deaths, including that of an "important local commander." One security force member was killed and four others were wounded, the military said.

Army Col. Attiq Ahmed told CNN about the military operation, and a Taliban spokesman in the area confirmed it.

Taliban spokesman Mullah Mansoor Dadullah said the militants were "resisting the army operation."

The Taliban "know who the people are who raise their voices for the operation," Dadullah said. "We know them; they are on our hit list and we will target them."

Lower Dir is one of the districts included in a recent peace deal between the government and the Taliban.

The agreement signed by Pakistani President Asif Ali Zardari allows the Taliban to implement Islamic law, or sharia, in the region in exchange for an end to fighting. Under the Taliban's strict interpretation of sharia law, women would be prevented from even being seen in public without their husbands or fathers.

The peace deal encompasses the Malakand Division, which includes the following areas: Swat, Lower Dir, Upper Dir, Buner, Shangla, Chitral and Malakand. Kohistan, which is not in Malakand division, is also covered under the deal.

Last week, the Taliban overran large sections of the Buner district, bringing them within 60 miles of the capital, Islamabad, in violation of the peace accord. The takeover of Buner brought the Taliban closer to the capital than it had been since it mounted its insurgency.

A Pakistani government official said Friday that the insurgents had completely withdrawn from the district by the end of the week, but a human rights group said people in Buner were reporting that local Taliban remained in the district.

Clinton says U.S. no longer AWOL on climate change

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WASHINGTON (CNN) -- Secretary of State Hillary Clinton told representatives of the world's leading economies Monday that the United States is no longer "absent without leave" in the global warming debate.

Secretary of State Hillary Clinton tells other countries that the U.S. is "back in the game" on global warming.

Secretary of State Hillary Clinton tells other countries that the U.S. is "back in the game" on global warming.

Clinton urged greater cooperation in advance of an international climate change conference to be held later this year.

Climate change is "an environmental issue, a health issue, an economic issue, an energy issue and a security issue," she said at the first preparatory session for the Major Economies Forum on Energy and Climate.

"It is a threat that is global in scope but also local and national in impact. ... No issue we face today has broader long-term consequences or greater potential to alter the world for future generations."

The preparatory session, being held Monday and Tuesday at the State Department, is meant to set the stage for the forum leaders' meeting in July in Italy.

"The science [of global warming] is unambiguous and the logic that flows from it is inescapable," Clinton said.

"Climate change is a clear and present danger to our world that demands immediate attention. Facts on the ground are outstripping worse-case scenario models that were developed only a few years ago."

In addition to the United States, the European Union and 15 other countries are participating in the preparatory session. Those nations are Australia, Brazil, Canada, China, France, Germany, India, Indonesia, Italy, Japan, Korea, Mexico, Russia, South Africa and the United Kingdom.

A representative from Denmark also is attending because that country in December will host the U.N. conference on its climate change framework.

At the Copenhagen conference, leaders will discuss a new global agreement on greenhouse gas emission levels to replace the Kyoto Protocol, which expires in 2012.

"The United States is fully engaged and ready to lead and determined to make up for lost time, both at home and abroad," Clinton added. "We are back in the game. We don't doubt the urgency or the magnitude of the problem."

Clinton cited, among other things, last month's U.S. Environmental Protection Agency ruling classifying carbon dioxide and other greenhouse gases as pollutants subject to the the Clean Air Act.

The ruling will allow for "more robust tailpipe emission regulations," she said.

She also highlighted the Obama administration's proposal for a broad, market-based cap on carbon pollution designed to help meet the goal of cutting national emissions 80 percent by 2050.

But international cooperation is needed to develop "meaningful proposals to move the process forward," she added. "New policy and new technologies are needed to resolve this crisis."

Ahead of the talks, environmental activists hung a large banner from a construction crane near the State Department with the message, "Too Big to Fail: Stop Global Warming -- Rescue the Planet." Two protesters dangled from cords hung from the corners of the banner.

WHO raises pandemic alert level; more swine flu cases feared

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(CNN) -- The World Health Organization has raised its pandemic alert level in response to the outbreak of swine flu that originated in Mexico, U.S. Homeland Security Secretary Janet Napolitano said Monday.

A man wearing a protective mask reads a newspaper Sunday outside a hospital in Mexico City.

A man wearing a protective mask reads a newspaper Sunday outside a hospital in Mexico City.

The move from level three to level four on the WHO's six-level threat scale means the world body has determined the virus is capable of significant human-to-human transmission -- a major step toward a flu pandemic, said Dr. Keiji Fukuda, the agency's assistant director-general.

A pandemic is not considered "inevitable," Fukuda said. But Napolitano said the move "does indicate that we have a serious outbreak of swine flu on our hands."

At least 75 cases have been confirmed worldwide, including 40 cases in the United States and 26 in Mexico, the WHO said.

Hundreds more cases are suspected, especially in Mexico, where as many as 149 deaths are thought to have been caused by the virus, the country's health secretary said.

"Sadly, 149 people have died, of which we are working to confirm if they are linked to the swine flu," Mexico Health Secretary Jose Angel Cordova Villalobos said. "The number of cases, unfortunately, will continue to increase."

So far, 26 cases have been confirmed by laboratory tests in Mexico and reported to the World Health Organization. Nearly 2,000 people have been hospitalized and 776 remain in hospitals, Cordova said.

The U.S. government is urging travelers to avoid nonessential travel to Mexico because of the swine flu outbreak, and it has started distributing antiviral medications from its strategic stockpile in response to the outbreak, Napolitano said.

The confirmed cases in the United States have been mild so far but, "Scientists can't tell us right now why this is presenting so severely in Mexico City and not as severely up here," she said.

Dr. Gupta in Mexico
Dr. Sanjay Gupta reports from Mexico on the spread, treatment and prevention of the swine flu.
Monday 10 E.T.

Federal officials confirmed 20 new U.S. cases on Monday.

A federal official said they were at the same school in New York in which eight U.S. cases were confirmed earlier. More than 100 students at the school were out with flu-like symptoms last week.

The outbreak is a particular concern because of who it is hitting hard, United Nations Secretary-General Ban Ki-moon said Monday.

"We are concerned that in Mexico, most of those who died were young and healthy adults," he said. Video Watch Mexican officials discuss flu plan »

President Obama said Monday that the swine flu outbreak is a "cause for concern and requires a heightened state of alert," but is not a "cause for alarm."

He added that the federal government is closely monitoring emerging cases and had declared a public health emergency as a "precautionary tool to ensure that we have the resources we need at our disposal to respond quickly and effectively."

Meanwhile, Andorra Vassiliou, the European Union's health commissioner, on Monday urged people "to avoid nonessential travel to the areas which are reported to be in the center of the clusters" of a swine flu outbreak.

Public Health Emergency

According to the World Health Organization, a public health emergency is an occurrence or imminent threat of illness or health conditions caused by bioterrorism, epidemic or pandemic disease, or highly fatal infectious agents or toxins that pose serious risk to a significant number of people.

At a White House news conference Sunday, Homeland Security Secretary Janet Napolitano said the emergency declaration is standard procedure -- citing that one was declared for the inauguration and for recent flooding.

The EU later said that Vassiliou's remarks were her personal comments and that travel advisories can be issued only by member states and not by the EU itself.

Swine influenza, or flu, is a contagious respiratory disease that affects pigs. It is caused by a type-A influenza virus. Outbreaks in pigs occur year-round. The current strain is a new variation of an H1N1 virus, which is a mix of human and animal versions.

When the flu spreads person-to-person, instead of from animals to humans, it can continue to mutate, making it harder to treat or fight, because people have no natural immunity.

The symptoms are similar to the common flu. They include fever, lethargy, lack of appetite, coughing, runny nose, sore throat, nausea, vomiting and diarrhea. Learn more about swine flu and how to treat it »

The virus spreads when an infected person coughs or sneezes around another person. People can become infected by touching something with the flu virus on it and then touching their mouth, nose or eyes.

The WHO has called the outbreak a "public health emergency of international concern."

Researchers are trying to determine how easily it can jump from person to person. Fukuda, the WHO's assistant director-general, said it was too early to predict whether there will be a mild or serious pandemic.

In Mexico, authorities closed all schools until at least May 6 because of the virus.

They are considering whether to suspend other public activities but are analyzing what economic effects could result, Health Secretary Cordova said.

Military troops distributed 4 million filter masks in Mexico City, which has 20 million residents. Video Watch CNN's Dr. Sanjay Gupta on the outbreak in Mexico »

The streets of Mexico City were eerily quiet Sunday afternoon -- a time when families are usually out strolling. Video Watch how even soccer suffers in Mexico »

Officials have talked about shutting down the bus and subway system, and incoming international passengers at the country's airports are asked on a form whether they have various symptoms that might indicate that they're carrying the virus.

Mexican Finance Minister Augustin Carstens said Sunday that the World Bank was lending his country $205 million to deal with the outbreak.

In Washington, the government declared a public health emergency -- a step Napolitano said, "sounds more severe that really it is."

"This is standard operating procedure and allows us to free up federal state and local agencies and their resources for prevention and mitigation," she said.

Meanwhile, Israel and New Zealand were investigating unconfirmed cases of swine flu.

Concerns about the virus prompted Canada to issue a travel health notice, and South Korea to say it will test airline passengers arriving from the United States.

Japan is expected to convene a Cabinet meeting Monday to come up with measures to block the entry of the virus into the country.

In New Zealand, officials said 22 students and three teachers, who returned from a three-week language trip to Mexico, might have been infected. The group remains quarantined at home, and Health Minister Tony Ryall said 10 students tested positive for influenza A -- the general category of strains that includes the H1N1 swine flu.

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In Spain, six people -- all recently returned from Mexico -- were being isolated in hospitals, the country's Health Ministry said. Lab tests confirmed that one of the people had tested positive. In Israel, doctors are running tests on a man who recently returned from Mexico with light flu symptoms. iReport.com: Do you think we should be worried about swine flu?

In 1968, a "Hong Kong" flu pandemic killed about 1 million people worldwide. In 1918, a "Spanish" flu pandemic killed as many as 100 million people.