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Strategies & Market Trends : Stocks Crossing The 13 Week Moving Average <$10.01

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To: James Strauss who wrote (7161)	3/5/2003 10:49:38 AM
From: Bucky Katt	Read Replies (1) of 13094

Dollar hits four-year low vs. euro Snow comments raise questions about U.S. position By Rachel Koning & Emily Church, CBS.MarketWatch.com WASHINGTON (CBS.MW) - The dollar was driven to a four-year low against euro Wednesday after comments from Treasury Secretary John Snow raised speculation about U.S. support for a strong currency. The euro at one point Wednesday was worth as much as $1.100. That's the weakest mark for the greenback since the middle of March 1999. The cross has since moved slightly in dollar's favor, with one euro worth $1.0956. Euro/dollar was trading at about $1.093 in New York trade Tuesday. Dollar/yen also weakened Wednesday, recently down 0.4 percent to 117.42 vs.117.65. The pound was recently up 1.2 percent on dollar to $1.5992. Stopped by reporters Tuesday after a Capitol Hill committee appearance to push the Bush stimulus plan, Snow said he doesn't "see anything troubling about" the dollar's recent decline. "The dollar is in the marketplace. Everything in the marketplace goes up some and falls some. It's within normal ranges," Snow said Tuesday, according to reports. A Treasury spokesman later clarified that the U.S. dollar position has not changed. The dollar has given up more than 20 percent against its European counterpart over the past 12 months and its decline has been quite steep in the short time since the Feb. 20-21 Group of Seven finance ministers meeting as geopolitical jitters have encouraged investment to leave the United States. The U.S. has long maintained that it favors a stronger dollar because that gives consumers more buying power and improves the standard of living. Still, just how strong a dollar level is desired is left open to debate. But analysts said even the appearance of a shift in policy signaled to currency markets the U.S. may instead welcome the benefits of growing its export market - thus boosting economic growth. A weaker dollar is beneficial to keeping U.S. goods competitive on world markets. The comments "confirm to us the U.S.'s relaxed position towards the weakening U.S. dollar," Deutsche Bank in London said. "For as long as the decline in the dollar is not an indication of capital flight from U.S. assets... then the process of a steady decline in the dollar is unlikely to be resisted by the U.S. authorities." "The dollar is sucking wind as geopolitical fears take center stage and send investors seeking shelter in anything but the greenback," analysts at Briefing.com said in a morning research note. The dollar's drop pressured stocks initially Wednesday, driving the Dow Jones Industrial Average ($INDU: news, chart, profile) to its lowest point since October. Stocks have since improved. See Market Snapshot. "We do not intend to comment on daily fluctuations in currency markets. Secretary Snow made the administration's position on the dollar very clear at his confirmation hearing," Treasury spokesman Tony Fratto said Wednesday. "He said that we have a consistent policy of favoring a strong dollar and sound, pro-growth economic policies and a commitment to free and open markets are the foundation for a strong dollar. The Secretary's position hasn't changed."

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