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To: long-gone who wrote (16687)	8/27/1998 10:57:00 AM
From: goldsnow	Respond to of 116762

Dollar Falls Against Yen as Russian Crisis Turns Focus to Mark-Yen Rate (Adds detail, comment on sterling, Swiss franc, hedge fund selling from 6th paragraph. Updates rates.) New York, Aug. 27 (Bloomberg) -- The dollar fell against the yen as concern that Russia's currency and stock market tumult may hurt Germany prompted investors to sell marks against major currencies. Germany is Russia's largest lender and trading partner, so signs of financial trouble in Russia make some investors and traders leery of holding marks. Many mark-yen transactions go through the dollar, so as traders sold marks to buy dollars, they also sold those dollars to buy yen. ''People are unloading marks across the board,'' said Susan Stearns, a director of foreign exchange at Bank of Montreal. Financial and political problems in Russia are ''not good news for Germany or Europe as a whole.'' The dollar fell to 142.86 yen from 144.05 yen late yesterday in New York. The dollar rose to 1.8090 marks from 1.8063 marks. Russia's bellwether RTS stock index fell more than 13 percent to a record low amid concern the ruble may decline further. The central bank halted trading between the ruble and dollar for a second day as demand for dollars exceeded supplies. That's reinforcing speculation President Boris Yeltsin, who sacked his government this week, may soon resign. The British pound and Swiss franc also rose as traders viewed the U.K. and Switzerland as shielded from problems in Russia and other emerging markets. Sterling, Swiss ''People are running to the pound and the Swiss franc is also benefiting,'' said Ricardo Gomes, head of foreign exchange at Republic National Bank. The pound rose to $1.6462 from $1.6382 and to 2.9778 marks from 2.9594 marks. The dollar fell to 1.4989 Swiss francs from 1.5052 francs, while the mark fell to 0.8283 Swiss francs from 0.8334 francs. Ordinarily, the dollar benefits in times of global financial and political strife. Still it failed to gain against the yen today. Traders and investors who have earned hefty returns on the dollar's 9 percent climb against the yen this year sold the U.S. currency to compensate for losses in emerging markets. In recent months, many investors had borrowed yen at Japan's low lending rates, then sold those yen to finance other, high- yielding investments, often in risky emerging markets. ''A lot of hedge funds have been borrowing yen, selling for dollars, then funding their positions,'' said Dick Alford, currency strategist at Potomac Babson Inc., a money management firm. Many are now ''unwinding'' those positions, he said. The yen also got a boost from speculation that Japanese officials may soon sell dollars to bolster the sagging yen. Haruhiko Kuroda, the director general of the Finance Ministry's International Bureau, said ''the yen is excessively weak and the dollar is too strong.'' bloomberg.com