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To: Bobby Yellin who wrote (18399)	9/10/1998 7:53:00 PM
From: goldsnow	Read Replies (2) \| Respond to of 116759

FOCUS-Dlr/mark sinks as Clinton woes, Kuehbacher weigh 10:16 a.m. Sep 10, 1998 Eastern LONDON, Sept 10 (Reuters) - The dollar fell against the mark on Wednesday to its lowest point since May 1997 amid nervousness over U.S. President Bill Clinton's political future and a German central banker's warning of further pressure on the dollar. The dollar extended its overnight losses below the 1.70 marks level seen after U.S. independent counsel Kenneth Starr said his report into sexual misconduct and perjury at the White House would reveal information that could impeach Clinton. ''This move was down to the Clinton story and its impact on the U.S. stock market,'' said Klaus Kusber, currency analyst at Dresdner Kleinwort Benson in Frankfurt. ''But normally these political factors are fairly short-lived and the market should have priced in a lot of this risk by now.'' Bundesbank member Klaus Dieter Kuehbacher accelerated the dollar/mark's decline in afternoon dealings when a German radio station quoted him as saying he did not rule out a further weakening of the dollar. The dollar fell to a 16-month low of 1.6875/85 marks in European trade after Kuehbacher's comments, down over two percent from late Wednesday's European levels around 1.7250 marks and down almost seven percent from late August. Counsel Starr presented the report of his eight-month investigation to Congress on Wednesday. It could be made public as soon as this Friday. But while the growing prospect of Clinton's impeachment prospect was the main story in markets on Thursday, dealers said it is merely a catalyst for a growing list of factors pressuring the dollar. ''A lot of the dollar move is down to worries over Clinton, but it's also been expectations of lower U.S. interest rates and the Russian situation improving slightly,'' said one U.S. bank dealer in London. ''Basically, it doesn't really matter to the market if Clinton stays or goes, it's not going to make a great deal of difference to the U.S. economy.'' But the U.S. economy is seen under threat from weakening emerging markets -- particularly from neighbouring Latin America -- and what impact that will have on U.S. corporate profits. ''Ultimately Clinton does not matter, it's a red herring. But the (Mexican) peso devaluation puts more pressure on the dollar,'' said Peter von Maydell, currency strategist at CSFB in London. From around mid-July, the peso has dropped by more than 18 percent against the dollar. On Thursday, it stood at 10.49/52 per dollar. The dollar was also pressured against the mark amid signs of a return to relative political stability in Russia. Russia President Boris Yeltsin's nomination on Thursday of acting Foreign Minister Yevgeny Primakov as Prime Minister is expected to find favour with Russia's Duma which twice rejected Yeltsin's original candidate Viktor Chernomyrdin. Although dealers said it was still early days before Russia's economic problems will be resolved, this move towards political stability will be supportive of the mark, the major currency seen most exposed to Russian turbulence. ((Andrew Reierson, London newsroom +44 171 542 6745, uk.forex.news+reuters.com)) Copyright 1998 Reuters Limited.