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Politics : Stockman Scott's Political Debate Porch -- Ignore unavailable to you. Want to Upgrade?

To: Jim Willie CB who wrote (6107)	9/11/2002 12:31:02 PM
From: stockman_scott	Read Replies (1) \| Respond to of 89467

Dollar Finds Support on 9/11 Anniversary Wednesday September 11, 10:12 am ET By Daniel Bases NEW YORK (Reuters) - Currency markets were thinly traded on Wednesday, overshadowed by the anniversary of the attacks on the United States, leaving price movements exaggerated and sending the dollar to a one-month high against the yen and a two-week peak against the euro. Given the anniversary, a delayed opening to the U.S. stock markets, an early close to the U.S. Treasury market and a lack of economic data, currency traders said the market does not have much to provide an impetus to trade. "It is extremely quiet, and really a non-market unless, God forbid, some event happens," said Mike King, trader at Commerzbank in New York. Talk of a relief rally for the dollar if the anniversary of the hijack attacks passes without incident has become muted. "Some people have mentioned a relief rally, but for the most part I believe that has already happened in both stocks and the dollar. The dollar rallied in the past few days and people discounted a follow-on terrorist attack as we got closer and closer to today," said King. The greenback drew strength in the last couple of sessions from recent firmness in U.S. share prices and a growing belief that the U.S. economy may be in better shape than those of Europe and Japan. Investors are keeping close tabs on Thursday's speeches, one by President Bush to the United Nations presenting his argument for what he sees as the need to remove Iraqi President Saddam Hussein from power, and testimony by Federal Reserve Chairman Alan Greenspan on the state of the U.S. economy before the House Budget Committee. "People are watching the next step and whether he will be convincing enough to the UN to justify invading Iraq, while with Greenspan the market wants to gauge the next step for interest rates," said Paul Mackel, currency strategist at Dresdner Kleinwort Wasserstein. By 9:26 a.m. EDT, the euro(EUR=) sank to 97.16 cents, a fresh two-week low and a loss of 0.30 percent on the day. In European data out on Wednesday, Germany's trade surplus widened in July as imports fell faster than exports, a sign that growth in Europe's largest economy was still anemic. Traders say the euro should remain in a range unless it breaks below 97.20, triggering stop losses or rise above 97.80 cents, which would technically alleviate downside pressure against the currency. The dollar edged to a one-month high of 120.56 yen (JPY=), a gain of 0.58 percent compared with Tuesday's New York close. The market showed a muted reaction to data showing Japan's economy grew by a real 0.6 percent from April to June from the previous quarter, slightly stronger than a preliminary estimate. The dollar climbed to a two-week high against the Swiss franc at 1.5082 francs (CHF=), up 0.77 percent on the day. ANNIVERSARY Some were also skeptical about the likelihood of a major security incident on the anniversary of the attacks that killed over 3,000 people, and were already shifting their attention to how U.S. markets would react on Thursday when full-day trading resumes. "Many short-holders have closed their positions this week as the pessimistic mood ahead of September 11 is slowly fading, with U.S. share prices showing strong gains," said Koichi Abe, forex section manager at Aozora Bank in Tokyo. So far this week, the Dow Jones industrial average (CBOT:^DJI - News) and the Nasdaq Composite index (NasdaqSC:^IXIC - News) were both up roughly 2 percent, while the S&P 500 stock index (CBOE:^SPX - News) has added 1.75 percent in value. U.S. stock markets are set to open at 11:00 a.m. EDT, while the Bond Market Association is recommending U.S. Treasury market trading end at 2:00 p.m. Eyes will now turn to the Fed's Beige Book at noon EDT, its anecdotal report on the U.S. economy. The report is expected to point to an improvement in interest-rate sensitive sectors like housing and autos but note stagnation in manufacturing. On Thursday, data on the U.S. current account are expected to show a widening deficit to $123.84 billion from $112.49 billion, creating a bigger hurdle for the dollar as more cash needs to be attracted to U.S. markets in order to balance against the cash leaving to pay for imports. "We are going to get the current account numbers tomorrow and another warning that the U.S. is on an unsustainable path, but the problem is Japan is on an unsustainable budget path and Europe just lumbers along," said Michael Rosenberg, head of foreign exchange research at Deutsche Bank in New York. "If investors are going to move their money out of the dollar, they don't know where to put it. Therefore it leads to range trading markets," he said.