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Strategies & Market Trends : January Effect 2003 -- Ignore unavailable to you. Want to Upgrade?

To: Londo who wrote (498)	6/1/2003 2:42:37 AM
From: RockyBalboa	Read Replies (2) \| Respond to of 666

Weird logic, pls clear me up: "4.362% for the next 28 years is rather low considering that Greenspan's probably done raising rates for the rest of his life" Did you mean: Greenspan done lowering rates?

To: Londo who wrote (498)	6/3/2003 4:32:54 AM
From: RockyBalboa	Read Replies (1) \| Respond to of 666

aha! So easy! Dollar Eases as Dealers Question Bush Tuesday June 3, 2:26 am ET By Yonggi Kang TOKYO (Reuters) - The dollar lost ground against the yen on Tuesday as dealers remained skeptical about President Bush's true intent after he expressed support for a strong U.S. currency at the Group of Eight (G8) meeting. The dollar began the day's trade near late U.S. levels of 118.60 yen but gradually came under pressure as U.S. funds sold the euro against the yen, acting as a drag on the greenback. Late on Monday, a senior U.S. official said Bush had told other G8 leaders at their summit in the French spa resort of Evian that he favored a strong dollar and that U.S. currency policy was unchanged. But the comment was seen providing little incentive to Tokyo dealers to push up the greenback. "If the market were to act on what's been said at the summit, the dollar could have gone up to 120 yen. But the market is clearly lacking that kind of dynamism," said a dealer at a major Japanese bank. "And even if it goes to that level, there's quite a lot of exporter offers lined up," he added. Traders said the currency market had factored in prospects of a discussion on currency rates at the three-day summit -- which ends on Tuesday -- after some leaders had shown concern about the dollar's fall and hinted the topic would be on the agenda. The greenback has slid more than 10 percent to all-time lows against the euro this year. Against the yen it is in line with its rate at the start of the year after falling to 115.10 yen in mid-May. At 1:42 a.m. EST, the dollar was trading at 118.33/41 yen compared with 118.62/70 in late New York. Trading in the euro was more cautious due to a closely watched policy meeting by the European Central Bank on Thursday. The single currency was quoted at $1.1756/59, mostly unchanged from late U.S. trading at $1.1756/62 . The euro dropped to 139.11/21 yen from late New York levels at 139.33/47 yen. DOLLAR POLICY QUESTIONED Few dealers took Bush's comments at face value and many say the U.S. administration will probably take a non-interventionist, laissez-faire approach to currency rates. "Bush expressed his intention to maintain the strong dollar policy at the Evian summit but the market is showing doubt," said Kazuhiro Miyake, a strategist at Daiwa Institute of Research. "A rapid fall in the dollar will be a negative factor for the U.S. economy but there's an underlying view that a gradual weakening of the dollar is in fact positive," he added. The Japanese bank dealer concurred. "What he really means with his 'strong dollar' policy is that the government will let the market decide currency rates. If U.S. economic fundamentals are strong the dollar will strengthen, and if they're weak the dollar will weaken." But some dealers warned that comments on the dollar from the G8 meeting could herald new trends in the greenback, adding that they needed more time to see the impact on the currency market. Japanese Finance Minister Masajuro Shiokawa gave a nod to Bush's comments, saying at a news conference that Washington's "strong dollar" policy was appropriate. With so many trades being done in dollars it would be a problem if the U.S. currency were not strong, Shiokawa said. He did not elaborate. Traders expect the dollar to have a hard time trying to break out of its trading range against the yen as the currency pair is caught between fears of Bank of Japan intervention on the downside and exporters' selling on the upside. For the European single currency, the market is focused on Thursday's ECB meeting and Friday's U.S. jobs data for May. Dealers are still split between a 25 basis point cut and a 50 basis point cut from the ECB's current benchmark refinancing rate at 2.50 percent. ---------------------------------------------------------- Earlier Comment: Reuters Bush: Dollar's Fall Contrary to Policy [Dollar going lower] Saturday May 31, 5:41 pm ET By Steve Holland KRAKOW, Poland (Reuters) - President Bush said the "devalued" level of the dollar on global markets runs contrary to U.S. policy in favor of a strong dollar, according to an interview transcript released on Saturday. Bush was interviewed by Russia's RTR TV on Thursday. The transcript was released by the White House on Saturday as Bush headed to St. Petersburg. Asked about U.S. dollar policy, Bush replied: "The policy of my administration is for there to be a strong U.S. dollar." When the reporter told Bush the dollar was not strong at the moment, Bush replied: "Well, I understand that. And the marketplace is making decisions as to whether the dollar should be strong or not. Our policy is a strong dollar. And we believe that good fiscal and monetary policy will cause our economy to grow and that the marketplace will see a growing economy and therefore strengthen the dollar," he said. "But you're right, the market, at this point in time, has devalued the dollar, which is contrary to our policy," he said. Bush's remarks were released on the eve of a Group of Eight summit in the French town of Evian, where any coordinated statement on volatile currencies could be treated as a sign that the dollar's sharp decline has gone too far, analysts say. Bush, as well as leaders of Japan and Germany, had already taken the unusual step of talking about currencies in advance of the G8 summit, spurring talk currencies may be on the agenda despite policymakers' recent efforts to downplay the issue. European and Japanese exporters have grown uneasy with the steep fall in the dollar this year, yet the dollar's decline has accelerated as currency markets perceived a lack of concern among policymakers from the world's richest nations. Those concerns peaked two weeks ago when U.S. Treasury Secretary John Snow appeared to adopt a hands-off approach toward the dollar's decline even while voicing Washington's long-standing commitment to a strong U.S. currency. Snow said the dollar's 15 percent decline this year was a "really fairly modest" realignment of currencies, remarks which were widely read as a signal to keep offloading the greenback.