By Edward Luce by Washington
Published: August 12 2008 20:08 Last updated: August 12 2008 21:17
Barack Obama on Tuesday netted the endorsement of three prominent Republicans, including Jim Leach and Lincoln Chafee, both of whom lost their congressional seats to Democratic opponents in the 2006 mid-term elections.
The announcement boosts the ranks of so-called “Obamacans” and is likely to fuel speculation about the possibility of bigger names – such as Colin Powell, former secretary of state, and Chuck Hagel, the Republican senator for Nebraska – also endorsing the Democratic nominee.
Describing Mr Obama’s call for change as “more renewal than departure” and thus in line with traditional conservative principles, Mr Leach said: “This is simply not a time for politics as usual . . . I have no doubt that a lot of Republicans will be attracted to Obama in spite of the flaws in this year’s primary process.”
The two Republicans, along with Rita Hauser, a former White House intelligence adviser, stressed foreign policy as their principal motivation for endorsing Mr Obama.
Ms Hauser described as “bellicose” the response of John McCain, the Republican nominee, to Russia’s conflict with Georgia.
Most “Obamacans” come from the so-called realist wing of the Republican party which has fallen into deep disenchantment with president George W. Bush’s foreign policy.
Some have also stressed their hope that Mr Obama would take a more aggressive approach to solving the Israeli-Palestinian crisis even though the Democrat has taken a strongly pro-Israel line. All said they supported Mr Obama’s pledge to talk to US adversaries, including Iran.
“There is a deepening split between the traditional Nixonian realist wing of the Republican party and the neo-conservatives that has become more pronounced with John McCain’s hardline anti-Russia rhetoric,” said Steve Clemons at the New America Foundation.
“I have good reason to believe that there will be other Republicans, such as James Baker [the former secretary of state], who may withhold endorsement from McCain rather than endorse Obama directly.”
Electoral analysts say there is unlikely to be a large switch of Republican voters, although Mr Obama’s endorsement by prominent Republicans could help sway independents into the Democratic column or encourage others to stay at home.
Mr McCain is working hard to win over hawkish Democrats to his camp, following his endorsement by Joe Lieberman, the former vice-presidential candidate, earlier this year.
There is a possibility that both Mr McCain and Mr Obama could choose running mates from opposition ranks in a bid for centrist voters. Mr Hagel is thought to be an outside choice for Mr Obama’s ticket and Mr Lieberman is on Mr McCain’s shortlist.
Copyright The Financial Times Limited 2008
The US dollar enjoyed its biggest one-day jump against the euro in eight years on Friday, as the long-running tendency of the dollar to weaken while commodity prices strengthened went into a dramatic reverse.
Against a trade-weighted basket of currencies, the dollar was at its strongest in four months. Meanwhile, there was a further sell-off of crude oil, which touched a low of of $115.61 a barrel – down more than $4 on the day. This was the lowest level since early May, and more than 20 per cent below its record high of $147.27 a barrel set last month. Non-energy commodities were also down more than 20 per cent from their peak.
The shift in sentiment was triggered by comments from Jean-Claude Trichet, president of the European Central Bank, who warned on Thursday that growth in the eurozone would be “particularly weak” in the third quarter.
This sparked speculation that the ECB would be forced to abandon its hawkish monetary policy stance and start cutting interest rates, a vital source of support for the euro.
“This is the watershed week for the US dollar,” said Marc Chandler, currency strategist at Brown Brothers Harriman. “The magnitude of the dollar’s moves and the breaking of key technical levels suggest that a major shift in the outlook toward the dollar is occurring as massive positions are adjusted.”
Other analysts described the widespread buying of dollars as “capitulation”.
The dollar rose to a five-month high of $1.5055 against the euro and climbed 1.3 per cent to $1.9189 against the pound, the currency’s strongest level since November 2006.
Traders said the violence of the move was testimony to the extent to which the market had been surprised by economic weakness outside the US and the softening of previously hawkish central bank rhetoric.
“Mr Trichet was unable to convince the public that the ECB had not been surprised by the eurozone’s economic downturn,” said Ulrich Leuchtmann at Commerzbank. “Therefore, the last remaining rate hike expectations were taken off the table.”
UK economic data has shown increasing weakness this week; officials in Japan warned that the economy was headed for a recession; and the Reserve Bank of Australia said it was planning to start cutting interest rates to head off an impending economic slowdown.
