Foreign Exchange

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Foreign Exchange Dollar Falls vs. Yen, Stays Flat vs. Others As Traders Await Fed Move, Japan Data By Jennifer M. Barrett 03/21/2000 The Wall Street Journal (Copyright (c) 2000, Dow Jones & Company, Inc.) NEW YORK -- The dollar retreated against the yen but barely budged against major European currencies in thin trading ahead of the Federal Reserve's Open Market Committee meeting today. With Tokyo closed for the Vernal Equinox holiday and traders awaiting today's Fed meeting and the release of new Japanese trade data late yesterday, dealers said dollar-yen trading was particularly light. A flurry of dollar-buying helped the U.S. currency make a brief break out of its 106-yen range as trading kicked off in New York. But the dollar had barely exceeded the 107-yen mark when it was beaten back by strong chart resistance. After struggling to stay above the intraday low of 106.28 yen midway through the New York session, the dollar was at 106.45 yen late yesterday, down from 106.66 yen at the start of the session and 106.79 yen late Friday. Japan was slated to release its January business-activity index and February trade surplus just before midnight. Analysts expect an increase in both. The euro had nudged up to 97.29 cents from 97.20 cents late Friday. The pound was trading at $1.5690, down from $1.5735 late Friday in New York. Sterling has slipped nearly 3% against the dollar since the start of the year. The release today of the 2000-2001 United Kingdom budget is not expected to have much effect on the currency. While a projected interest-rate hike by the Fed should provide support in the longer term for the dollar, it is unlikely... ... middle of paper ... ... expected in late March. The Australian dollar rose to 60.92 cents late in New York from 60.50 cents late Tuesday. The Australian Reserve Bank said yesterday that it had opted to leave interest rates unchanged. The South African rand retraced earlier losses against the dollar. It ended the New York session at 6.4685 rand to the dollar, compared with 6.5315 rand late Tuesday. Steven Leach, chief economist for Citibank's foreign-exchange desk in New York, wasn't surprised by the rand's reversal. He said the South African currency, which is still down more than 5% against the dollar for the year, has been undervalued at recent levels. The dollar also slipped further against the Mexican peso, as the Mexican stock market surged more than 3.6%. Late yesterday, the dollar was buying 9.269 pesos, compared with 9.28 pesos late Tuesday.

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