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Gold/Mining/Energy : Gold Price Monitor

GDXJ 97.80

+0.9%

Nov 19 4:00 PM EST

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To: goldsnow who wrote (21876)	10/17/1998 4:59:00 PM
From: Alex	Read Replies (2) of 116764

Dollar To Face Strong Selling Pressure After Fed's Rate Cut TOKYO (Nikkei)-The surprise interest-rate cut by the U.S. Federal Reserve on Thursday is fueling the view in Tokyo that the dollar will face stronger selling pressure against the yen. During European trading on Friday, the dollar fell to the 113-yen level at one point. Amid growing fears of a credit crunch, expectations that the Fed will ease credit one more time this year are supporting the dollar's bearish outlook. In addition, speculators such as hedge funds are expected to continue to buy yen and sell dollars to cover their losses. A Fuji Bank official, like other currency traders in Tokyo, says that the Fed's action - taken before the November Federal Open Market Committee meeting - was a surprise. But the abrupt move also signaled the seriousness of problems in the U.S. financial markets, according to an Asahi Bank official. In the wake of hedge funds' crises, volatility in the U.S. markets has not yet let up. Turmoil in Latin America and other emerging markets is also causing concern about the earnings of U.S. banks and corporations. By cutting the rate by only a quarter of a percentage point this time, the U.S. left room for further reductions, some market players point out. The U.S. may lower rates by a full percentage point by early next year, which some players believe would make it harder to buy the U.S. currency. (The Nihon Keizai Shimbun Saturday morning edition)

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