Euro rises against dollar in Tokyo trade

Published November 13th, 2000 - 02:00 GMT

The euro rose against the dollar in Tokyo Monday as investors sold the greenback on the still unresolved result of the US presidential election, dealers said. 

 

The European single currency traded at $0.8634 around 2:00 pm (0500 GMT), up from $0.8600 in New York, but down from $0.8693-96 in Tokyo late Friday. 

 

"Investors sold the dollar as they disliked the prolonged US presidential election result and the Nasdaq hit the record low of the year," said Sanwa Bank dealer Mitsuru Sahara. 

 

The Nasdaq composite index fell 12.2 percent over the week and closed Friday at its lowest level of the year, hovering around the 3,000-point threshold. 

 

The tech-heavy Nasdaq slid 171.36 points (5.35 percent) to close on Friday at 3,028.99. The blue chip Dow Jones industrials slumped 231.30 points (2.13 percent) to 10,602.95. 

 

"The effect of the last (European Central Bank's) intervention had a supporting effect on the euro (against the dollar)," Sahara said. 

 

The European Central Bank breathed life back into a market paralysed by the race for the White House Thursday by launching its fourth single-handed intervention in just five working days.  

 

In Singapore, traders agreed the delayed result of the US election, to decide whether Republican George W. Bush or Democrat Vice President Al Gore should be the next US president, continued to weigh down the dollar. 

 

"Opinion on the impact of a Bush or Gore win in USD (is) more clearly defined — a Bush victory is seen as dollar supportive, whereas a Gore victory is dollar negative," a Singapore research institute, IDEAglobal.com, said in a report. 

 

"Nonetheless, the ongoing uncertainty in the election count is a negative influence on the US sharemarket and demand for USD," it said. 

 

Against the yen, the euro traded at 93.23 in Tokyo at 2:00 p.m., down from 93.63 late Friday. 

"Although investors had bought the euro on expectation that the ECB might intervene again, there has not been any intervention. That is why investors sold the euro since London trade Friday," Fuji Bank dealer Wako Ogawa said. 

 

The dollar meanwhile bought 107.96-98 yen at 2:00 pm, up slightly from 107.95 yen in New York and 107.65-68 yen in Tokyo late Friday. 

Investors did not want to buy the yen because of the uncertain Japanese political situation as well. 

Koichi Kato, former secretary general of the ruling Liberal Democratic Party (LDP), hinted during a television interview on Sunday that he would vote in favour of a no confidence motion against Japan's Prime Minister Yoshiro Mori if it was submitted. 

 

"As the Mori cabinet might resign following (Kato's remarks), and given the Nikkei's sharp plunge, investors had little incentive to buy the yen (against the dollar)," Sahara said. 

 

The Tokyo Stock Exchange's Nikkei-225 index fell 3.3 percent by the close of Monday morning's session, losing 499.06 points to 14,489.48.— (AFP)  

 

© Agence France Presse 2000  

© 2000 Mena Report (www.menareport.com)

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