NewsMine — economy — united-states — 2003 — 2003-sept-oct — Viewing Item

Dollar plunges 3 year low Original Source Link: (May no longer be active)    http://stacks.msnbc.com/news/970010.asp?0sl=-22 http://stacks.msnbc.com/news/970010.asp?0sl=-22 Dollar plunges to near 3-year low Comments at Group of Seven meeting spurs greenback’s fall NEW YORK, Sept. 22 — The dollar fell broadly on Monday, hitting a near three-year low against the yen after markets interpreted a Group of Seven call for flexible exchange rates as a sign that Japan may stop weakening its currency to boost exports. ALTHOUGH STILL SHARPLY weaker on the day against the yen, the dollar was stabilizing somewhat in early afternoon trade in New York, as traders continued to second-guess the circumstances under which the Bank of Japan would be prepared to undertake yen-weakening interventions. “The market right now is not sure whether the BoJ will come in to intervene or not,” said Hongyi Chen, currency strategist with Banc of America Securities in New York. “We believe the Japanese government will still like to see (the dollar) around 115.0 yen, but it is not politically convenient,” to intervene while the International Monetary Fund meetings continue this week, Chen said. “Later this week or early next week, if the yen keeps on going up they will have to (intervene),” he added. The G7 major industrial nations, in a weekend communique from Dubai, called for more exchange rate flexibility to help iron out global economic imbalances. Markets viewed the statement as criticism of persistent intervention by Asian countries to keep their currencies weak for the benefit of their export markets. The yen, which posted massive gains last week, vaulted higher against the dollar, as did the euro, Swiss franc, sterling and the “commodity” currencies such as the Australian, Canadian and New Zealand dollars. Analysts said the dollar may press lower as markets digest the G7 statement. But with little other market-moving news or data scheduled for Monday, the key to short-term dollar direction may lie in chart patterns. In early trade the dollar shed 2 percent against the yen to notch a near-three-year low of 111.41 yen, but it rose off that low as the morning unfolded. Analysts continued to cite 111.40-50 as near-term support. The G7 communique was a contrast to its usual, more reserved, promise to “monitor exchange markets closely and co-operate as appropriate.” “In this context, we emphasize that more flexibility in exchange rates is desirable for major countries or economic areas to promote smooth and widespread adjustments in the international financial system, based on market mechanisms,” the statement said. By early afternoon, the dollar was down 2.08 percent against the Japanese currency to 111.69 yen. Against the Swiss franc, the dollar was down 1.1 percent to 1.3517 francs. The euro was up 0.98 percent to $1.1490 against the dollar. Against the yen, the euro was down 1.1 percent to 128.37 yen. The pound was up 1.06 percent to $1.6532. Japanese officials insisted the G7 statement did not represent an appreciable change to its forex policy. Japan’s top financial diplomat Zembei Mizoguchi said the nation’s stance on acting in currency markets had not changed. Newly appointed finance minister Sadakazu Tanigaki echoed that view. Some analysts said that despite Japan’s public stance, markets seem to think intervention is now less likely. Furthermore, U.S. support for the statement may signal a departure from the U.S. strong dollar policy. “For a long time, the United States has been moving away from a strong dollar policy. This (the G7 statement) is definitely another nail in the coffin,” said Lara Rhame, senior economist with Brown Brothers Harriman in New York. Speaking from Dubai, U.S. Treasury Secretary John Snow denied a shift in the policy. “There’s no change in the strong-dollar policy,” Snow told reporters when asked whether there was a shift. Snow refused to comment on currency movements since the G7 meeting. Earlier, Atlanta Federal Reserve Bank President Jack Guynn said on Monday the pieces for a more solid, broad-based U.S. recovery were “falling into place,” although it appeared the economy was still losing jobs. © 2003 Reuters Limited. All rights reserved. Republication or redistribution of Reuters content is expressly prohibited without the prior written consent of Reuters.

2 years in a row more in poverty Asian debt withdrawal threat to us deficit { September 7 2003 } Asian unpegging crucify us { October 3 2003 } Bush bid weaken dollar against asia { September 24 2003 } Bush cuts schools highways { September 10 2003 } Bush priorities under scrutiny Bush takes credit economic upturn { September 1 2003 } China brings us export resictions into trade debate Deficit not manageable { September 18 2003 } Deflation still worries federal reserve { September 17 2003 } Deflation will continue for years { September 10 2003 } Disappointed earnings bonds rally Dollar gains on euro { September 2 2003 } Dollar over valued { September 18 2003 } Dollar plunges 3 year low Dollar tumbles low against euro { October 8 2003 } Economy expands fastest since 1984 no jobs { October 31 2003 } Fed holds rates warns on deflation Firms dont buy rebound Firms still slashing jobs Foreign investors fear weak dollar { September 22 2003 } Gold hits 7 year high { September 25 2003 } Gold records as tumbling dollar { September 10 2003 } Government claims unemployment stabilizing { October 3 2003 } Grocery workers 3rd day strike san diego { October 14 2003 } Job loss like great depression Jobless claims lowest eight months { October 9 2003 } La transit strike may strand 500 thousand { October 14 2003 } Mass august layoffs { September 26 2003 } Monthly costs iraq approach vietnam Poor gained 1 3m in 2002 { September 3 2003 } States risk big losses bond funding pensions { October 12 2003 } Stocks at 14 month high { September 2 2003 } Stocks fall economy worries { September 30 2003 } Stocks lower after production data Stocks rebound hopes intact { October 1 2003 } Stocks rise on upbeat analyst reports { September 8 2003 } Stocks slip bonds rise Trade gap bring down dollar warns imf { September 19 2003 } Trade gap could bring down dollar { September 19 2003 } Uninsured increases 2 4 million last year { September 30 2003 } Us bonds face gloomier future as selling continues { September 7 2003 } Us closes last levis manufacturer { September 26 2003 } Us losing millions manufacturing jobs { September 4 2003 } Weak dollar raises stocks Files Listed: 45

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