Euro languishes on Duisenberg comments
The euro languished in Asia Tuesday on comments by European Central Bank (ECB) chief Wim Duisenberg discounting the prospect of intervention if the Middle East erupts into war.
Around 6:00 pm (0900 GMT) in Tokyo the euro bought 0.8501 dollars, after spending most of the day below 85 US cents. It was down from 0.8510 dollars in New York and 0.8529 dollars in Tokyo late Monday.
Asked whether central banks should intervene if all-out war in the Middle East caused sharp currency volatility, Duisenberg told The Times of London: "I wouldn't think so."
"Aside from his comment, the euro remained weak as few investors expect joint intervention to prop up the currency, particularly ahead of the US presidential election" in November, said Ogawa Wako, a dealer at Fuji Bank.
The euro was quoted at 91.95 yen, down slightly from 91.96 in New York and 92.19 in Tokyo Monday afternoon.
"As the US elections draw nearer, it is felt that the United States is less likely to intervene and the ECB may hesitate without the US assurance," research house IDEAglobal.com said in Singapore.
"However, the ECB may attempt to prop up the market through commercial purchases."
Dollar-yen trade was stuck as Middle East protagonists led by US President Bill Clinton met for a make-or-break summit in Egypt aimed at ending two weeks of violence between Israel and the Palestinians.
"Investors are very reluctant to take any action right now as they are concerned over the outcome of the Middle East summit," said Wako.
The dollar was quoted at 108.13 yen, against 108.06 yen in New York and 108.09 yen in Tokyo late Monday.
In late Singapore trade, the dollar rose to 1.7531 Singapore dollars from 1.7508, 8,875 Indonesian rupiah from 8,855, 43.4325 Thai baht from 43.32, 1,131.36 South Korean won from 1,127.20, and 32.265 Taiwan dollars from 31.98.
The greenback fell to 48.31 Philippine pesos from 48.72. – (AFP)
© Agence France Presse 2000
© 2000 Mena Report (www.menareport.com)