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To: Alex who wrote (22990)	11/15/1998 3:20:00 PM
From: goldsnow	Respond to of 116785

Dollar's safe-haven bid eases with Iraq tension 04:35 p.m Nov 13, 1998 Eastern By Al Yoon NEW YORK, Nov 13 (Reuters) - The dollar tread water against the German mark on Friday as tensions over Iraq ebbed and amid uncertainty over whether the Federal Reserve will lower interest rates again next week. Traders said the dollar's safe-haven bid eased after Iraq's news agency reported Iraqi President Saddam Hussein told a Russian envoy the country was ready to react positively to initiatives that meet legitimate demands. ''When push comes to shove he doesn't want his country to be bombed and by opening the door just a little he prevents an imminent strike,'' said Ben Strauss, a vice president at Bank Julius Baer. ''The Iraq news probably took the dollar down.'' In late trading, the dollar was little changed at 1.6847 German marks against 1.6845 at the close on Thursday. The U.S. unit rose to 122.78 yen from 121.78. The dollar had risen more than one pfennig earlier as Washington continued to mass military might in the Gulf and as U.S. officials repeated demands that Iraq must resume full cooperation with U.N. weapons inspections. Expectations the Fed will continue its cycle of cutting interest rates at a policy-making meeting on Tuesday capped the dollar's attempted rise. A quarter-percentage point cut in the 5 percent federal funds rate was widely expected despite a report showing U.S. retail sales rose 1.0 percent in October. The results were double Wall Street expectations and curbed speculation of a dangerous slowdown in U.S. growth, analysts said. The University of Michigan's consumer sentiment index rose to a preliminary 102.4 in November from 97.4 in October. ''The urgency (for a rate cut) clearly is less than it was last time around, with the stock market rallying recently and with the better economic data, but the market is still split,'' Strauss said. An announcement by the International Monetary Fund and the Group of Seven industrialised nations to provide Brazil with a $41 billion financial package in an effort to stave off an Asian-style meltdown buoyed the dollar a bit. Elsewhere, the dollar clawed back ground against the yen as markets questioned whether an new package of economic stimulus measures in Japan would lift the nation out of its worse recession since World War II. Traders initially registered disappointment with the ruling Liberal Democratic Party's proposals for an extra budget worth 10 trillion yen ($81.3 billion) but a Japanese news report that measures could be twice that amount curbed yen selling. ''Everyday it seems like there are more and more positive things coming out of Japan,'' said a trader at a Japanese bank in New York. In other trading, sterling rose to $1.6642 from $1.6604 at the close on Thursday. The dollar fell to 1.3872 Swiss francs from 1.3885 and rose to Canadian $1.5499 from C$1.5459. Copyright 1998 Reuters Limited.

To: Alex who wrote (22990)	11/15/1998 8:33:00 PM
From: goldsnow	Respond to of 116785

Re-inflation efforts take Jurrasic proportion? bloomberg.com