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

To: RockyBalboa who wrote (504)	6/1/2003 8:12:44 PM
From: RockyBalboa	Read Replies (1) \| Respond to of 666

Dollar Firms as G8 Seen Discussing Forex Sunday June 1, 7:41 pm ET TOKYO (Reuters) - The dollar was trading higher against the euro and yen on Monday after officials from G8 countries indicated that the sensitive issue of currency rates would be discussed at their summit in France. ADVERTISEMENT "The dollar is strengthening this morning because of reports that currencies will be a topic at the G8 meeting," said Hiroyuki Watanabe, forex manager at Shinsei Bank. "The currency market will be watching the G8 meeting very closely today and tomorrow," he added. With stagnation or worse threatening some of the Group of Eight economies -- particularly Germany, Japan and Italy -- Italian Prime Minister Silvio Berlusconi acknowledged on Sunday that currencies would be discussed during Monday morning talks on economic prospects. "We will be busy tomorrow," Berlusconi said when asked by reporters about the dollar, which has fallen to record lows against the euro in recent days, raising fears that exports from the 12-nation euro zone will lose price competitiveness. A senior Japanese official traveling with Prime Minster Junichiro Koizumi also said currencies would be a topic when leaders in a French spa resort of Evian. At 7:35 p.m. EDT Sunday, the dollar was quoted at 119.50/55 yen (JPY=) versus 119.21/29 in late U.S. trading on Friday. It is expected to trade between 119.20-120.00 yen on Monday. Traders said that even though the dollar would be testing its upside in Monday's trade, the currency would meet stiff psychological resistance at 120 yen. "It's not like there's a major options trigger there, but (120 yen) will be an important psychological point," said a dealer at Mizuho Corporate Bank. He added that possible dollar selling by Japanese exporters would be another focus during Tokyo hours. The dollar recovered the 119 yen level last week for the first time in a month, supported by latest gains on Wall Street as well as recent comments by President Bush that the United States still backed a strong dollar. Japan's manufacturing economy contracted in May, according to a Reuters survey issued on Monday, suggesting that a pickup in April was a blip and that the overall trend was still down. The Reuters/Nomura/JMMA Purchasing Managers survey showed that its overall index fell to 49.0 in May, slipping below the 50 mark after rising above that threshold for the first time in eight months in April, when it stood at 50.1. Against the euro, the greenback was trading at $1.1715/20 (EUR=) compared with $1.1782/88 in late U.S. trading. Dealers saw more room for the euro to weaken -- as much as toward $1.15 later this week -- especially with a closely watched European Central Bank policy setting meeting on Thursday. Many currency dealers have factored in a possible monetary easing by the central bank but any rate cut would undermine its advantage over the dollar from interest rate differentials.