To: peter michaelson who wrote (10323 ) 8/29/2002 12:25:26 AM From: StockDung Respond to of 19428 Dollar Falls on Concern U.S. Reports Will Show Economy Stalling By Kanako Chiba Tokyo, Aug. 29 (Bloomberg) -- The dollar fell for a second day in three against the yen on expectations reports tomorrow will show U.S. consumer confidence and manufacturing stagnated this month, damping demand for the nation's assets. The U.S. currency dropped to 118.14 yen at 1:05 p.m. Tokyo time from 118.88 in New York yesterday. Against the euro, it weakened to 98.23 U.S. cents from 97.85. The dollar is headed for a losing month against both the yen and the euro. ``The U.S. economy seems quite bad,'' said Takashi Toyahara, foreign exchange manager at Nomura Securities Co. ``The bias is for a weaker dollar.'' A slide in the three key U.S. stock indexes yesterday, one of which left the Nasdaq Composite Index down almost 33 percent this year, also cut demand for the currency, traders said. ``We were beginning to expect the Dow to rebound last week, but the Dow heading lower, our expectation is betrayed,'' said Hideyuki Tsukamoto, a foreign exchange manager at Mizuho Bank Ltd. ``The money will keep leaving the U.S.'' The U.S. currency may decline to as low as 113 against the yen in coming months, Tsukamoto said. The University of Michigan's consumer confidence index, scheduled for release tomorrow, probably fell for a third month in August to 88, according to a Bloomberg survey, compared with a reading of 88.1 in July. The Conference Board said Tuesday its index of optimism among consumers -- two-thirds of the economy -- fell to the lowest level since November. An index of manufacturing in the Chicago area will probably show a reading of 52 this month, from 51.5 in July, the lowest level since January, according to a Bloomberg News survey of economists on another report Friday. GDP U.S. government figures later today will show that growth in the world's largest economy slowed to a 1.1 percent annual rate in the second quarter, according to economists surveyed by Bloomberg News. That would be the weakest three months this year. The dollar also weakened on concern the U.S. will attempt to oust Iraqi President Saddam Hussein, analysts said. Vice President Dick Cheney on Monday said it's ``imperative'' to remove Hussein. The costs of such a strike may weigh on the U.S. economy, and it may prompt retaliation from terrorists, analysts said. ``We cannot get rid of the idea that the U.S. wants to attack Iraq, even if they are alone in doing so,'' said Hiroshi Sakuma, a foreign exchange associate director at Barclays Bank Plc. ``That concern prevents people from buying the dollar.'' In other trading, the dollar dropped to 1.4956 Swiss francs from 1.5019 in New York. Against the British pound, it slid to $1.5373 from $1.5329.