Dollar starts U.S. lower as Iraq bombing wears off
NEW YORK, Dec 17 (Reuters) - The dollar opened lower as safe-haven support amid U.S. air raids on Iraq wore off and U.S. President Clinton juggles conducting a military action while trying to stave off impeachment, dealers said.
''I'm really disappointed there was no follow through after the bombing, and the dollar just drifted off,'' said Vincent Amaru, foreign exchange vice president at Citibank. ''The range in London was absolutely zero.''
The dollar succumbed to profit taking over 117 yen and 1.6750 marks as the House of Representatives seemed certain to impeach after briefly postponing debate for the Iraq action.
The dollar opened at 1.6630/40 marks, down from 1.6760/70 at Monday's close and the 1.6780 overnight high. Dollar/yen was down at 115.87/97, compared to 116.90/00 at the close and a high of 117.15.
Also weighing on dollar/yen was growing talk about trade frictions between Japan and the United States. Such worries may have been tempered by U.S. trade data released after the open.
But even if so, the dollar took no support from news the October trade deficit fell to $14.19 billion from September's revised $14.37 billion. The smaller gap contrasted with expectations of a rise to $15.1 billion.
Dollar/yen sell orders were stacked above 116.50 with stop-loss buy orders behind 117.30, dealers said, adding that longs would probably sell at a loss below 115.25.
With many expecting the joint U.S.-UK operation in the Middle East to be over within a relatively few days, the safe haven flows into the dollar were slowing to a trickle almost as soon as the air raid sirens went off over Baghdad.
''If you look all the way back to the Gulf War and Kuwaiti invasion prior to that, you had an initial dollar jerk higher, then people came in and purchased currencies,'' said John Hazelton, a trader at PNC Bank. ''It just follows the pattern.'' |
