Dollar Ends Lower Against Euro, Sterling
Dow Jones Business News English
(Copyright (c) 2003, Dow Jones & Company, Inc.)
A Wall Street Journal Online News Roundup
NEW YORK -- The U.K. pound took center stage Monday, bouncing back from three-month lows as the dollar retreated against most of its major rivals.
Late Monday, sterling was changing hands at $1.5998, down from session highs of $1.6020 but up sharply from $1.5898 late Friday. Against the euro, which ended at 0.7089 pounds on Friday, sterling had pushed the European currency down to 0.7090 pound after it rose to 0.7140 pound earlier in the session for the first time since the week of June 2nd.
In trading that was otherwise muted by a Japanese holiday that kept Tokyo markets closed, sterling recovered its earlier bruising losses while the dollar followed U.S. stock markets lower. The pound was able to stem its steep slide, which began Friday and continued early in Monday's session, when the suicide of Ministry of Defense advisor David Kelly no longer appeared to be an immediate threat to the government of Prime Minister Tony Blair.
"Now that more information has come out about Kelly and the scandal doesn't appear as damaging as first thought, even though many suspect Blair is politically on the ropes, the movements in [Monday's] markets may be seen as some light at the end of the political tunnel," said Josh Levy, president of the CMC Group's North American operations in New York.
Meanwhile, the dollar sank to session lows against the euro following the midmorning release of U.S. Conference Board June Leading Index data, which came in as expected at plus 0.1%. However, the result wasn't enough to inspire either currency or equity investors. The Dow Jones Industrial Average fell 91.46, or 1%, to 9096.69 while the Nasdaq Composite Index shed 27.02, or 1.6%, to 1681.48, and the Standard & Poor's 500 Index fell 14.52, or 1.5%, to 978.80.
"A quiet [spot] market is being pushed around by equity markets," said one New York trader.
The euro, which had been chomping at the bit to break above $1.1300, promptly rose to $1.1348, paring back only slightly to $1.1337 late Monday, still significantly above its late Friday $1.1275 level.
Comments by Deutsche Bundesbank President Ernst Welteke that current euro-zone interest rates were at very low levels and that further cuts wouldn't necessarily have a positive effect on growth appeared to have had little impact on currency markets, however. Against the Swiss franc, the dollar also retreated, trading at 1.3523 Swiss francs late Monday, down from 1.3606 francs on Friday.
The dollar did, however, succeed in making some strides against the yen, trading at ¥118.76 before settling at ¥118.48, up a touch from ¥118.38 on Friday. Tokyo traders were on holiday Monday, contributing to what traders said was the overall thinness of the market.
North of the border, the U.S. dollar gave up some of its gains against its Canadian counterpart, sinking to $1.4036 Canadian dollars from C$1.4062 late Friday, in moves that mirrored those of other so-called commodity currencies -- so named because of the dependence of their economies on commodities such as gold and oil.
Against the South African rand, the dollar was buying 7.5850 rands late Monday, down significantly from 7.6700 rands late Friday. For its part the Australian dollar had risen to 65.17 U.S. cents late Monday from 64.70 cents late Friday, all in all rounding out what was a rather lackluster day's performance for the U.S. currency.
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