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Strategies & Market Trends : Booms, Busts, and Recoveries -- Ignore unavailable to you. Want to Upgrade?

To: smolejv@gmx.net who wrote (44865)	1/17/2004 3:08:01 AM
From: elmatador	Read Replies (1) \| Respond to of 74559

<<Nov elections as the reason for the latest hooplas in currency/gold arena>> DJ can you imagine how many businesses are suffering from the lower USD? ALl people who import are taking a hit and they vote too!!! Struggling With the Falling Dollar nytimes.com

To: smolejv@gmx.net who wrote (44865)	1/17/2004 3:10:40 AM
From: elmatador	Read Replies (1) \| Respond to of 74559

G-7 Meeting in february: <<the G7 industrial nations should act responsibly next month. He said it was "in the interest" of all G7 members to discuss "the imbalances" that affect exchange rates.>> The finger is not going to point to China but to the twin deficits! The the plummeting will resume. news.ft.com Euro drops to lowest this year against dollar By Tony Major in Frankfurt, David Pilling in Tokyo and Jennifer Hughes in London Published: January 16 2004 20:21 \| Last Updated: January 16 2004 20:21 The euro fell on Friday to its lowest level this year against the dollar as European policymakers renewed their efforts to talk down the single currency amid fears that its rise risks stifling the eurozone's recovery. The barrage of comments drove the euro almost 2 per cent lower to $1.2354, leaving it about 4 per cent down on the record level of just under $1.29 it reached earlier this week. However, the yen rose to its highest level against the dollar since September 2000 on Friday, raising concern in Tokyo that Japan's year-long policy of massive intervention was running out of steam. The dollar tumbled to Y105.73 against the yen, dangerously close to the Y105 level at which Japanese exporters say they lose international competitiveness. A measure of how seriously Japan is taking the yen's rise came yesterday when Sadakazu Tanigaki, finance minister, used his most forthright language yet to urge the US to act. "The markets are reacting to the twin deficits and terror risks. "In order to get currencies to reflect economic fundamentals, the US deficits need fixing," he said. "The US economic recovery is firm, but the dollar is weakening for other reasons." Leading the chorus of European concern, Otmar Issing, the European Central Bank's chief economist, said he was worried about the speed of the euro's rise but insisted it had not had a big impact on growth so far. Reiterating ECB president Jean-Claude Trichet's comments made earlier in the week, Mr Issing said the bank was "not indifferent to the exchange rate . . . but [was] concerned about large fluctuations". He said strong global demand was partly offsetting the detrimental impact of the euro on exporters. But bank officials fear Europe's economic outlook will deteriorate if the single currency appreciates much more. Mr Issing's remarks were echoed by Guy Quaden, Belgian central bank governor and ECB council member, who said a further rise in the euro might pose a threat to the eurozone's economic upturn. Mr Issing was the fifth ECB governing council member to enter the fray since Mr Trichet first signalled the bank's concern over the euro. ECB officials are concerned that volatile foreign exchange markets could undermine business confidence. The bank's "verbal intervention" was helped by US data showing a big jump in foreign purchases of US assets in November which suggested the US faces no real difficulty in financing its current account deficit. "The report was a shot in the arm for the dollar," said Michael Woolfolk, currency strategist at Bank of New York. "It was a vote of confidence in US securities." Meanwhile, European policymakers stepped up pressure for a statement on currency volatility from Group of Seven finance ministers and central bankers who will meet in Florida early next month. Francis Mer, the French finance minister, said the G7 industrial nations should act responsibly next month. He said it was "in the interest" of all G7 members to discuss "the imbalances" that affect exchange rates. But the mounting concern of eurozone policymakers stands in stark contrast to the relaxed stance adopted by Washington. On Friday, John Snow, the US Treasury secretary, maintained that the US supported a strong dollar and added the familiar rider that the determination of exchange rates is best left to the market. The US administration is widely believed to be reluctant to commit to any explicit plan to reverse or slow the dollar's decline.