Ramsey
22-07-2002, Mon 1:44 PM
المقال من داوجونز نيوزواير
DJ FOREX FOCUS JULY,22 2002 07:17 GMT
JULY,22 2002 07:17 =DJ Forex Focus: Early Dollar Respite Seen Unlikely To Last
By Nicholas Hastings
Of DOW JONES NEWSWIRES
LONDON (Dow Jones)--A little profit-taking helped the dollar get a bit of early respite Monday morning in Europe, but its decline is expected to resume given the poor outlook for U.S. equities.
"The pressure is still on for losses on the dollar," said Kamal Sharma, a currency strategist with Commerzbank in London, noting that the DJIA, S&P and NASDAQ futures have already been marked down in anticipation of further losses in U.S. equities.
Although it had been widely expected, sentiment toward the U.S. markets was being hurt by confirmation that WorldCom had filed for Chapter 11 protection, making it the largest bankruptcy in U.S. history with $32 billion of outstanding debt.
Coming after the heavy 390-point loss in the DJIA and 38-point decline in the Nasdaq Friday, and in the absence of any major U.S. economic data this week, the news is expected to keep the market focused on the problems the U.S. administration is having in bolstering investor confidence with new reforms on corporate governance.
Sharma said while the dollar might have been able to rebound from its lows late Friday in the U.S., any rallies will be seen as excellent selling opportunities.
Some of the dollar support came from the latest round of verbal intervention from Japan, with senior officials there making another determined effort to stop the yen from strengthening any further.
Finance Minister Masajuro Shiokawa told parliament that he is very concerned about foreign exchange and is watching the market closely.
Zembei Mizoguchi, a senior official at the ministry, went one step further, warning that the Bank of Japan is prepared to step in if the dollar comes too near to Y115.
As European trading got underway, the dollar traded at Y116.28, up from Y115.69 late last Friday in New York. The euro, meanwhile, is at $1.0115, down from $1.0132 in New York.
The dollar also managed to post a small gain against the Swiss franc, even though the franc itself was benefiting elsewhere from its safe-haven role in times of uncertainty.
The dollar is up at CHF1.4420, up from CHF1.4407 late Friday in New York. The euro, however, is down at CHF1.4587 from about CHF1.4600. At one stage in Tokyo trading it had fallen closer to CHF1.4560.
The Swiss franc was rising not only on the growing concerns about what is happening on Wall Street but on weekend reports that the Organization of Petroleum Exporting Countries is threatening a price war if Russia doesn't take steps to reduce is growing production of crude oil.
"This is the last thing the global economy needs," Sharma said, noting that the uncertainty had already started to push the price of gold higher.
Looking ahead, market sources are now debating whether the Bank of Japan will be prepared to intervene in the market again at this stage or whether it will continue to rely on rhetoric to try and keep the yen from rising much more.
Sharma suggested that despite Mizoguchi's comment about protecting Y115, the Japanese authorities will probably stay out of the market as long as it looks as if U.S. equities are going to continue falling.
He said he would expect the Bank of Japan to continue waiting until the right opportunity arises, especially after their last intervention attempt at the end of June appears to have had such a limited impact.
"They want to be in a position to catch the market as short as possible," he said.
DJ FOREX FOCUS JULY,22 2002 07:17 GMT
JULY,22 2002 07:17 =DJ Forex Focus: Early Dollar Respite Seen Unlikely To Last
By Nicholas Hastings
Of DOW JONES NEWSWIRES
LONDON (Dow Jones)--A little profit-taking helped the dollar get a bit of early respite Monday morning in Europe, but its decline is expected to resume given the poor outlook for U.S. equities.
"The pressure is still on for losses on the dollar," said Kamal Sharma, a currency strategist with Commerzbank in London, noting that the DJIA, S&P and NASDAQ futures have already been marked down in anticipation of further losses in U.S. equities.
Although it had been widely expected, sentiment toward the U.S. markets was being hurt by confirmation that WorldCom had filed for Chapter 11 protection, making it the largest bankruptcy in U.S. history with $32 billion of outstanding debt.
Coming after the heavy 390-point loss in the DJIA and 38-point decline in the Nasdaq Friday, and in the absence of any major U.S. economic data this week, the news is expected to keep the market focused on the problems the U.S. administration is having in bolstering investor confidence with new reforms on corporate governance.
Sharma said while the dollar might have been able to rebound from its lows late Friday in the U.S., any rallies will be seen as excellent selling opportunities.
Some of the dollar support came from the latest round of verbal intervention from Japan, with senior officials there making another determined effort to stop the yen from strengthening any further.
Finance Minister Masajuro Shiokawa told parliament that he is very concerned about foreign exchange and is watching the market closely.
Zembei Mizoguchi, a senior official at the ministry, went one step further, warning that the Bank of Japan is prepared to step in if the dollar comes too near to Y115.
As European trading got underway, the dollar traded at Y116.28, up from Y115.69 late last Friday in New York. The euro, meanwhile, is at $1.0115, down from $1.0132 in New York.
The dollar also managed to post a small gain against the Swiss franc, even though the franc itself was benefiting elsewhere from its safe-haven role in times of uncertainty.
The dollar is up at CHF1.4420, up from CHF1.4407 late Friday in New York. The euro, however, is down at CHF1.4587 from about CHF1.4600. At one stage in Tokyo trading it had fallen closer to CHF1.4560.
The Swiss franc was rising not only on the growing concerns about what is happening on Wall Street but on weekend reports that the Organization of Petroleum Exporting Countries is threatening a price war if Russia doesn't take steps to reduce is growing production of crude oil.
"This is the last thing the global economy needs," Sharma said, noting that the uncertainty had already started to push the price of gold higher.
Looking ahead, market sources are now debating whether the Bank of Japan will be prepared to intervene in the market again at this stage or whether it will continue to rely on rhetoric to try and keep the yen from rising much more.
Sharma suggested that despite Mizoguchi's comment about protecting Y115, the Japanese authorities will probably stay out of the market as long as it looks as if U.S. equities are going to continue falling.
He said he would expect the Bank of Japan to continue waiting until the right opportunity arises, especially after their last intervention attempt at the end of June appears to have had such a limited impact.
"They want to be in a position to catch the market as short as possible," he said.