The dollar fell sharply against the yen in Tokyo Tuesday as investors were unnerved by an unfounded rumor that US Fed chairman Alan Greenspan would quit, dealers said. "A rumor of Greenspan's resignation rapidly depressed the dollar," said Kiyoshi Kuzuhara, a dealer at Bank of Tokyo-Mitsubishi. "But like many market rumors, this one soon turned out to be completely unfounded."
The greenback fell to 116.10-13 yen by 5:00 pm (0800 GMT) from 116.58 yen in New York. But it was little changed from 116.10-12 yen in Tokyo late Monday. The US currency hit a low of 115.95 yen following the rumor, plunging from an earlier high in Tokyo of 116.59 yen.
The rumor over the departure of the 74-year-old Federal Reserve chairman immediately presented a dollar-selling lead, with investors worried who would take over in guiding the slowing US economy, Kuzuhara said. But amid the lack of major leads, investors soon returned to the sidelines to wait for the announcement later in the day of February US consumer confidence figures and Wednesday's Greenspan testimony in the US Congress.
"Until we see the figures, we have no incentive to move in any way," ABM AMRO's dealer Toshiyuki Takamatsu. "If the figures are bad, the dollar will be sold against major currencies." The euro meanwhile bought $0.9142-45, up from $0.9119 in New York but down from $0.9167-69 in Tokyo late Monday.
Against the yen, the euro fetched 106.10, down from 106.31 in New York and 106.43 in Tokyo Monday afternoon. Research house IDEAglobal.com said in Singapore although the euro had declined from its New Year highs of around $0.9600, its growth prospects remained solid amid uncertainty over the US economy.
"Euroland is becoming the relative safe haven—an oasis of solid if undramatic economic growth in an uncertain world," it said in a report.
Another dealer said the European single currency was currently stuck in a narrow range. "Given the current Turkish situation, the euro remains within the range of $0.90 and $0.92," said Mitsubishi Trust and Banking dealer Yasuharu Tsuru. —(AFP)
© Agence France Presse 2000
© 2001 Mena Report (www.menareport.com)
