The dollar slipped against the yen on Wednesday, January 24, in a nervous wait for a report card on the health of the US economy to be delivered by US Federal Reserve chairman Alan Greenspan, traders said. The euro, however, dipped against the dollar on profit-taking after breaching $0.94 on Tuesday.
Greenspan's semi-annual congressional testimony on Thursday will be watched closely for hints of any loosening of monetary policy after the Fed surprised investors by cutting interest rates by 50 basis points this month. "Investors have already factored in another 50-basis-point decrease, and they are looking for reassuring words from Greenspan's testimony," said Mizuho Trust and Banking dealer Osamu Yamamoto.
"His remarks will also hint at the state of the US economy. If the tone is bad, then that would trigger selling of the dollar," he said. The dollar traded at 116.90-93 yen at 2:00 pm (0500 GMT), down from 116.98 yen in New York and 117.07-10 yen in Tokyo Tuesday afternoon. "Investors took profits on the dollar," said Fuji Bank dealer Yoshiyasu Naruse.
But the dollar's fall was likely to be limited ahead of Greenspan's Senate appearance, which precedes a two-day meeting of Fed policymakers from next Tuesday, he said. "Investors have already woven in a rate cut. The attention now is on how much the reduction will be," Naruse said.
The yen shrugged off new figures showing a 27.4-percent year-on-year plunge in Japan's December trade surplus to 816.1 billion yen ($7.0 billion). "Despite the fall, Japan has still posted a big surplus, which is not seen as any lead in the market," Naruse said.
The euro bought $0.9365 around 2:00 pm, down from $0.9372 in New York and $0.9405-08 in Tokyo Tuesday afternoon. Investors took profits on the euro after its strong rally of recent weeks, Naruse said. Against the euro, the Japanese currency traded at 109.51, compared with 109.85 in Tokyo late Tuesday.—(AFP)
© Agence France Presse 2000
© 2001 Mena Report (www.menareport.com)
