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To: re3 who wrote (71389)	10/23/1999 10:15:00 AM
From: Giordano Bruno	Respond to of 86076

Dollar's Woes To Continue Into 2000 ------------------------------------------------------------------------ REUTERS INDEX \| INTERNATIONAL \| BUSINESS \| TECHNOLOGY ------------------------------------------------------------------------ Filed at 7:40 a.m. EDT By Reuters NEW YORK (Reuters) - The U.S. dollar, which has slumped in recent months amid economic recoveries in Asia and Europe, is expected to weaken further in the year ahead against other major currencies. In a quarterly Reuters poll, U.S. economists revised their forecasts sharply lower for the dollar's exchange rate against the Japanese yen and the European single currency. ''The downward momentum is so strong in the dollar that it will be very hard to change it,'' said Chris Rupkey, senior financial economist at Bank of Tokyo Mitsubishi. ''The dollar had got a relative boost when foreign economies were weak -- and now it's only fair as their economies come back to life that the dollar should suffer.'' Over the past three months the dollar has lost some 15 percent of its value against the yen as stronger-than-expected growth in Japan spurred investor interest in Japanese assets. Economists, on average, forecast the dollar would trade at 108.44 yen at the end of 1999, falling to 107.58 yen by the end of next year. By contrast, a survey three months ago had called for the dollar to rise above 125 yen at the end of 2000. ''You had people forecasting a train wreck in the Far East, and those expectations were not met,'' Rupkey said, explaining the steep downward revision in expectations. Europe's single currency was also seen appreciating against the dollar to trade at $1.0863 at the end of the fourth quarter of this year and $1.1631 at the close of 2000. The euro's end-2000 forecast was revised upward from a previous average projection of $1.1282. The euro has already started to reverse the steep downtrend against the dollar seen in the first half of the year, which pushed it close to parity with the dollar in July. Economists see Europe's economic outlook continuing to improve, and a widely expected interest rate rise by the European Central Bank should increase the euro's appeal. Other dollar-bearish factors are also at play. The dollar is vulnerable to declines on Wall Street, where stock and bond markets have come under pressure from concerns that strong U.S. growth may fuel inflation and provoke higher interest rates. America's international trade deficit is widely seen as unsustainable, as improving global economies vie with U.S. assets for investments. ''We're looking for more dollar weakness, and the story is a combination of heavy current account financing needs and larger increases in foreign yields than U.S. yields,'' said Jim O'Sullivan, economist at J.P. Morgan. ''We think the Fed has more tightening to do but we expect even more tightening in most other industrial countries, including Europe and Canada.'' he added. Dollar declines against the British pound and Canadian dollar are also widely expected, according to the poll. Sterling is expected to trade at $1.6516 per pound at the end of the fourth quarter of this year, and rise to $1.6613 at the end of next year. The U.S. currency was pegged at C$1.4608 in fourth quarter of 1999, falling to C$1.4292 a year later. The poll was conducted the week of Oct. 11.