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Euro and yen recover in quiet session |
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August 17, 2000
NEW YORK (AP) - The dollar fell slightly against the euro and the yen in quiet trading Tuesday as currency traders are holding back ahead of the Federal Reserve's next meeting on Aug. 22. The euro hold on to its recent gains against the dollar, quoted at 91.32 cents in late New York trading, up from 90.49 cents late Monday. "The most important level for the euro is the technical range of 91.50 cents," said John Cholakis, euro trader at Dai-Ichi Kangyo Bank Ltd. "It's too early to say that the euro has started a recovery. In a longer term, you have to be dollar bullish and euro bearish." Cholakis added that despite speculation over the possibility of a new interest rate raise engineered by the European Central Bank in coming weeks, there were still a lot of question marks regarding the euro. Most traders expect the ECB to raise European rates soon while the Fed is believed to leave the U.S. rates alone, which could make the euro more attractive to investors. The Fed has raised interest rates six times over the past 14 months in an effort to slow down the economy and keep inflation in check. The Fed policy-makers are meeting on Aug. 22 to decide whether a a seventh interest rate increase is necessary or not. Recent economic data - including the Fed's industrial production report released Tuesday - have shown that the red-hot U.S. economy is growing at a more sustainable pace, lifting concerns about economic overheating and inflationary pressures. In other trading, the dollar was quoted at 109.16 Japanese yen, down from 109.51 yen. "The yen's move was mostly technical," Cholakis said. "It was just a small correction." Most traders shrugged off the yen's rise, as a Monday report on Japanese corporate bankruptcies for July fueled concerns about the country's economic recovery. In a historic move, Japan's central bank lifted the country's interest rates from their near zero levels up to 0.25 percent, putting an end to a decade-long policy. Many analysts fear that higher borrowing costs could stifle Japan's anemic economy. In other trading, the dollar also was quoted at 1.7095 Swiss francs, down from 1.7192, and 1.4845 Canadian dollars, down from 1.4855. The British pound fell to dlrs 1.5035 from dlrs 1.5040. Currencies of the 11 countries participating in the euro are no longer traded separately and are tied to the euro by a fixed rate. Based on Tuesday's euro rate, the dollar was worth 2.1417 German marks, down from 2.1563; 7.1831 French francs, down from 7.2437; and 2,120.31 Italian lire, down from 2138.23.
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