USD at 112.43
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To:John Madarasz who
wrote (13593)
From: UnBelievable
Friday, Sep 14, 2001 12:41 PM
Respond to of 13594
DJ Dlr Falls As Informal Agreement Fades, Reality Bites
09/14/2001 Dow Jones News Services
(Copyright © 2001 Dow Jones & Company, Inc.)
NEW YORK (Dow Jones)--After support earlier this week from an informal
agreement in foreign exchange markets not to take advantage of major
terrorist attacks on the U.S, the dollar succumbed Friday to bleak reality.
In the wake of Tuesday's events, the dollar had demonstrated a remarkable
degree of resilience, barely moving against its major counterparts on the day
after the attacks.
Much of this was due to what some analysts dubbed a "gentleman's
agreement" not to profit from a terrible situation.
But as more volume and turnover returned to currency markets, fears about
the tremendous impact the attacks could have on the U.S. and global
economies have combined to push the dollar sharply lower against the yen
and to six-month lows against the euro.
According to analysts, this is now prompting the return of speculators to the
market.
"Up until today, it seemed like people were holding fire," said one
London-based currency strategist who asked not to be named. "Now, I'm
hearing talk of hedge funds genuinely out there trading this thing, with at least
some sort of preparation for what's going to happen on Monday," when U.S.
equity markets open.
The dollar fell through a key support level against the yen in early New York
trade Friday, sliding at one point to Y116.96, before recovering to around
Y117.44, its lowest level since March 2.
The dollar also hit a six-month low against the euro at $0.9246, before
recovering to hover around the 92 cent level.
Analysts say that despite the desperate shock in the global financial
community, currency trading will inevitably pick up and money managers must
begin to price in some of the impact the attacks will have on global capital
flows, economic growth and investor confidence.
Market watchers also fear that major moves in currencies - such as Friday's
sharp spike in dollar/yen - will ultimately force traders to readjust positions.
"There are definitely some speculators back in the market," said Tim
Mazanec, senior foreign exchange analyst at Investors Bank & Trust in
Boston. "You just can't ignore these kind of levels."
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