November 7, 2001	Wednesday	Shaba’an 20, 1422

TOKYO, Nov 6: The dollar slipped against major currencies in nervous trade ahead of key meetings by US and European central banks, where policy makers are expected to slash rates, dealers said on Tuesday.

The greenback traded at 121.54-56 yen against 121.80 yen in New York and 121.73-75 yen in Tokyo late Monday.

The euro bought $0.8974, compared with $0.8971 in New York and $0.8985-87 in Tokyo late Monday.

People are just waiting for the FOMC (Federal Open Market Committee) and the ECB (European Central Bank) rate decision later this week, said Yasuji Yamanaka, foreign exchange manager for Nikko Trust and Banking. But still it seems like the dollar rebound will be very limited.

Yamanaka said he expected the Federal Reserve to cut rates 50 basis points when it meets on Tuesday and the ECB to cut rates 25 basis points at its Thursday meeting.

But he said the dollar interest would be muted as traders realize the significance of last week’s weak economic figures such as the 5.4 per cent unemployment rate and 15th straight month of manufacturing declines.

The euro would weaken against the yen as traders test its downside, analysts said.

Against the Japanese unit, the euro was quoted against 109.27 in New York and 109.40 in Tokyo Monday afternoon.

The euro is extending its slump, mainly on position adjustments (ahead of the ECB meeting), said Standard and Poor’s Naito.

The European currency’s fundamentals have also been weakened by hawkish comments overnight from Bundesbank president Ernst Welteke, who warned the central bank might boost liquidity too much.

The euro is more likely to suffer this week than not... more specifically, we believe the euro will lose some ground against the dollar, DBS Bank said in Singapore.

While there is no certainty as to how much the Fed will lower rates, it is clear that it is likely to do more than less. On the other hand, the ECB is likely to do less, or nothing, than more, it said.

Yamanaka from Nikko Trust and Banking said there were few Japanese factors affecting the currency.

In late Singapore trade, the US dollar slipped to 10,790 Indonesian rupiah from 10,860 on Monday and 1,295.550 South Korean won from 1,296.050.

The greenback strengthened to 51.975 Philippine pesos from 51.910, 1.8241 Singapore dollars from 1.8178 and 34.522 Taiwan dollars from 34.5230.—AFP