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Last week US$ gave a
target of 115.52 came close to being met today... new target given down to
112.03 to same area as prior targets given pre 911 112.27
112.09
Dorothy
10/29 2:12P (DJ) =DJ Economic Data
Beginning To Hurt Dollar Vs MajorsStory 4790 (P/1074, N/DJN,
N/DJWI, N/DJRT, N/DJS, N/FRX, N/NJR, N/SNEW...) By John Hardy
Of DOW JONES NEWSWIRES NEW YORK (Dow Jones)--With
this week's U.S. economic data expected to be bad, traders acted Monday by
selling the dollar against both the euro and yen. Although nobody has
great faith in the fundamental strength of either of the euro zone or Japan,
the dollar may have to struggle to retain the positive undertone it has
shown in the past few weeks as traders start to focus more on the potential
length and depth of the U.S. economic slowdown. With the military
campaign against the Taliban government of Afghanistan and Osama bin Laden's
Al Qaida network proving less dramatic than many had anticipated, attention
is shifting to economic fundamentals and away from geopolitical events,
traders said. The assertion that the U.S. economy is best positioned
to rebound from a global slowdown has also come under close scrutiny.
"We started to see a shift (against the dollar) Thursday last week,"
said David Durrant, chief currency strategist at Bank Julius Baer in New
York, "and we're starting to see it in the prices - we expect (dollar
weakness) to continue this week." While the dollar may be lower
at week's end, the decline is not expected to push either the euro or the
yen into a new trading range. "We're not of the belief that the
dollar will just plunge," said Durrant, "maybe (the euro) will go to
$0.9150-$0.9200." The key to the dollar's recent change of tone was
Thursday's worse-than-expected U.S. durable goods and existing home sales
data which caused the currency to weaken sharply across the board - more
than reversing gains made earlier that day on market disappointment with the
European Central Bank's "no change" interest rate decision for the euro
zone. Nevertheless, the dollar had been doing quite well, when all
market-affecting factors are considered, analysts said. Since the Sept. 11
attacks, the euro hasn't made any sustainable headway against the dollar. It
peaked briefly at a high of $0.9330 on September 17, then slid back to touch
a post-attack low at $0.8871 last week. Nor has the yen done much
better, with the dollar seeing a low at Y115.84 on Sept.20 before staging a
recovery to approach Y123 last week. Despite "softish (U.S.) data,"
we've had "two weeks of very bullish sentiment" for the dollar, said Bank
Julius Baer's Durrant. At 2.00 p.m. EST (1900 GMT) New York Monday,
the euro was at $0.9038, below its intraday high at $0.9050 but stronger
than $0.8962 at the London open and above $0.8923 late Friday in New York.
The dollar was at Y122.03, down from Y122.42 in London and Y122.74
late Friday in New York. It was also changing hands at 1.6310 Swiss francs,
sharply down from 1.6525 francs on Friday in New York. The pound firmed to
$1.4521 from $1.4371 late Friday. With the post-attack recovery
waning, the U.S. currency will remain under pressure ahead of two
closely-watched economic announcements this week, both of which are expected
to be dollar-negative, analysts said. On Wednesday, U.S.
third-quarter preliminary gross domestic product is expected to show
negative growth, after last quarter's 0.3% rise. "Market forecasts
range between a 0.5%-2.5% annualized fall in third quarter's GDP," wrote Ram
Bhagavatula, chief economist at Royal Bank of Scotland in New York, "with
our own estimate at a 1% drop." Bhagavatula adds that not merely is
the number expected to be negative, "but there is more than usual
uncertainty in these estimates since the behavior of inventories and the
trade deficit in September are largely unfathomable." However, the
real test for the dollar will come on Friday, with the October employment
report, traders said. Analysts are uniformly bearish on both headline
non-farm payrolls - expected to fall by more than 300,000, following last
month's 199,000 drop - and the unemployment rate - seen as likely to rise
above 5%. Throughout the week, the dollar is expected to take its
tone from U.S. equities - the Dow Jones Industrial Average is already off
about 200 points Monday - and analysts anticipate that shares will react
badly to any new evidence of an economic downturn. -John Hardy,
Dow Jones Newswires; 201-938-2122; john.hardy@xxxxxxxx
(END) DOW JONES NEWS 10-29-01 02:12 PMAdditional Codes (
N/SNEW, M/EUR, M/GBP, M/JPY, M/NND, M/USD, P/DAA, R/ASI,R/FE, R/JA, R/NME,
R/PRM, R/US)
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