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Strategies & Market Trends : Currencies and the Global Capital Markets -- Ignore unavailable to you. Want to Upgrade?

To: Paul Berliner who wrote (2537)	8/30/2000 1:44:22 PM
From: Hawkmoon	Read Replies (1) \| Respond to of 3536

Cable? This is something new for me... Are you referring to Cable and Wireless or something else? Pardon me for my ignorance and please educate me.. Thanks.. Btw, here's the latest on the FOREX markets as we watch to see which way this breaks.. But one point.. the Euro hit a new low against the yen. And the Japanese were HEAVILY invested in the Euro when it came as they sought to diversify from their overinvestment in the dollar. I would imagine there is still some unwinding of positions taking place in the regard. news.ino.com US FX Review: Euro hits lifetime low vs yen, 6-day low vs dollar By James Thornhill, BridgeNews New York--Aug. 29--The euro weakened sharply against its major counterparts in U.S. trade Tuesday on fears a tighter European monetary policy might drag on growth. The euro hit its lowest point against the yen since its Jan. 1, 1999 inception and a six-day low against the dollar. Dollar/yen, meanwhile, dropped to a seven-and-a-half-week low of 106.00 in the wake of euro/yen's decline. * * * Current Previous Change Global Global NY close NY close low high USD/JPY 106.12 106.49 -0.37 106.00 106.73 EUR/USD 0.8927 0.9001 -0.0074 0.8914 0.9021 EUR/JPY 94.75 95.86 -1.11 94.56 96.19 GBP/USD 1.4562 1.4687 -0.0125 1.4559 1.4715 USD/CHF 1.7333 1.7135 0.0198 1.7130 1.7360 USD/CAD 1.4853 1.4820 0.0033 1.4815 1.4881 "The fundamental events that emerged today are not ones you'd normally associate with a weakening currency. But I think underlying today's euro fall are concerns that a pick up in interest rates will reduce the euro zone's growth potential going forward," said Robert Lynch, currency analyst at Paribas. The events Lynch was referring to were stronger-than-expected German second quarter growth numbers (up 1.1% on the quarter at an annual rate of 3.1%), more jawboning from euro zone officials and a sharp rise in the ECB's weekly marginal refi tender to 4.68%, from 4.47% last week. All these factors offered the euro fleeting support, but were ultimately washed away in a tide of negative sentiment. In fact, expectations of an imminent ECB rate hike, perhaps as soon as Thursday were cited by many as a weighing on the euro rather than lending it support. As Lynch pointed out, the fear is that in acting decisively to combat an inflationary threat the ECB also serves to choke off euro zone growth before it has built up a head of steam. Given that growth rates in most euro zone countries continue to lag behind those enjoyed in the U.S., many market players are still happier holding dollars. Euro/dollar was seen triggering stops below Friday's low of 0.8975 in early U.S. trade. It held around $0.8950 for a time amid talk of Asian and U.S. bids, but further selling pressure from U.S. and European banks forced it to fresh lows. Euro/yen's tumble added to the down pressure with the pair finally hitting a floor at $0.8914. Bank of France governor Jean-claude Trichet and Bundesbank president Ernst Welteke presented a united front, both indicating that they thought the market had underestimated the euro's fundamental value. Dealers remained unconvinced. The Swiss franc also had a hand in the euro's downfall. Dollar/Swiss franc gobbled back a big chunk of its recent losses, gaining over two centimes on the day. Meanwhile, euro/swiss shrugged off some aggressive early selling from a couple of Swiss accounts to bounce back to a four-day high of 1.5477. Some dealers pointed to reports that Swiss banking giant Credit Suisse was in takeover talks with U.S. financial group Donaldson Lufkin Jenrette as weighing on the swissy, though its unlikely there were any direct flows linked to a possible deal at this early stage. Dollar/yen danced to euro/yen's drumbeat for most of the U.S. session. The pair ran into good selling interest in the 106.60-70 region on an early blip up and was pegged back from there to a low of 106.00. Talk of option protection ahead of expires at 105.95 later in the week lent some support near the lows. Overnight, the yen's recent strength was sapped slightly by news of another decline in Japanese consumer spending for July. Meanwhile, head of the Ministry of Finance's International Bureau, Zenbei Mizoguchi, repeated his warning that the yen's latest rise is undesirable. Euro/yen plumbed its lowest level ever, hitting some pretty hefty sell stops when the previous low of 94.87 buckled under. The cross finally coming to rest at a new milestone of 94.56. There was no fresh fundamental news to explain the decline, though dealers noted talk of good selling interest from a U.S. moneycenter bank, among others.