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To: ~digs who wrote (5322)	7/11/2001 10:26:52 AM
From: Bucky Katt	Respond to of 48461

This story may be of interest, as a weakening dollar will have a big effect on many things> Dollar Falls on Concern Argentine Turmoil May Damp U.S. Growth By Mark Tannenbaum New York, July 11 (Bloomberg) -- The dollar fell to a two- week low against the euro on concern rising Argentine borrowing costs may damp economic growth in Central and South America and crimp U.S. exports to the region. Prospects for weakness in U.S. stocks, given a continued flow of companies slashing profit forecasts, also dragged on the currency, analysts said. The dollar is declining on concern ``the U.S. economic slowdown might be more far-reaching'' than previously thought, said Greg Salvaggio, a currency analyst at Tempus Consulting in Washington. The U.S. currency weakened to 86.30 cents per euro, from 85.50 late in New York yesterday, and reached its lowest level since 86.59 on June 27. The dollar sank to 124.55 yen, from 125.42, touching a one-week low. It also fell against the Swiss franc and British pound. Argentina paid a record 14 percent for a treasury bill sale yesterday, as investors fretted a three-year recession may force the nation into default. The Brazilian real and Mexican peso both tumbled a second day. U.S. exports to Central and South America amounted to 6.1 percent of a total $782.4 billion worldwide last year, according to U.S. government data. Argentina alone accounted for 0.6 percent of total U.S. exports. ``A Latin American debt crisis may affect a second-half U.S. recovery,'' said Savvas Ladonikolas, a currency trader at ING Barings in London. That worry is pushing the dollar lower, he said. Eastern Europe Switzerland's currency rose to its strongest in almost two months, leading the euro up as well, as it attracted investors fleeing East European currencies such as the Hungarian forint, said analysts. Concern about emerging markets prompted some investors to move money out of the Hungarian forint and Polish zloty, analysts said. The forint has dropped 11 percent and the zloty 11.5 percent against the dollar in the past five days. Many investors trade the zloty and forint against the euro, said Mitul Kotecha, head of currency research at Credit Agricole Indosuez. ``When those are sold, it benefits the euro,'' he said. Roiled debt and currency markets in Latin America may also have helped the yen, said traders. Investors who had borrowed in Japan, where interest rates are near zero, and then invested in Latin American countries are now moving to reverse those trades, buying back yen. Some investors ``were long a lot of these emerging-market currencies against the yen and are unwinding that,'' said John McCarthy, a director of trading at ING Baring (U.S.) Capital Markets.