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Topic: Dollar Slips to 3-Year Low Vs Euro
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Trafield
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Dollar Slips to 3-Year Low Vs Euro
Reuters
Thursday, December 26, 2002; 3:12 AM
By Kazunori Takada
http://www.washingtonpost.com/wp-dyn/articles/A38805-2002Dec26.html
TOKYO (Reuters) - The dollar slipped to three-year lows against the euro and a four-year low against the Swiss franc in holiday-thinned Asian trade on Thursday as worries over a possible war with Iraq continued to pressure the greenback.
Traders said sentiment remained bearish for the U.S. currency as speculation is growing that the United States will attack Iraq shortly after January 27 -- the deadline for United Nations arms inspectors to give their reports to the U.N. Security Council.
Israel's military intelligence chief has told lawmakers that any U.S. assault on Iraq is likely to be in early February, the Israeli parliament's spokesman said on Wednesday.
"I think the market is almost 100 percent convinced that there will be war," said Koichi Ono, economist at Daiwa Institute of Research.
Although some analysts think the impact of war on the U.S. economy would be negligible, especially if it finished quickly, the dollar is under pressure as many firms are likely to curtail investment before the war ends, putting a brake on the economy.
Safe-haven buying pushed up the Swiss franc as far as around 1.4035 per dollar, its highest since February 1998. As of 2:44 a.m. EST, the dollar was at 1.4041 against 1.4059 in late Asian trade on Wednesday.
Helped by stop-loss buying, the euro firmed to as high as $1.0344 it best since November 1999, before inching down to 1.0334. It fetched $1.0318 in late Asia on Wednesday.
The single currency stood at 124.20 yen little changed from Wednesday's 124.27 yen.
The greenback also edged down to 120.12 yen, compared with 120.41. Traders noted sporadic selling from Japanese exporters.
The market showed little reaction to Prime Minister Junichiro Koizumi's comments that Japan's economy had in a sense been hurt by the strength of the yen.
European and U.S. markets were closed on Wednesday for Christmas. London will also be closed on Thursday.
"It's very quiet. Orders from investors seem very limited," said Yoshiyasu Naruse, senior manager of treasury sales at HSBC.
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