October 1, 2002	Tuesday	Rajab 23, 1423

LONDON, Sept 30: The dollar sagged against other major currencies on Monday as US stocks headed for another rocky start following Friday’s rout on Wall Street with geopolitical tensions also weighing on the US unit.

The single European currency climbed to $0.9853 from 0.9807 late on Friday in New York.

The dollar fell to 121.79 yen from 122.53 on Friday.

After Wall Street’s catastrophic performance (Friday) the environment is once again negative for the dollar, said CIBC currency economist Audrey Childe-Freeman.

The Dow Jones Industrials Average sank 3.7 per cent on Friday while the technology-laden Nasdaq Composite index lost 1.8 per cent, with futures contracts indicating US stocks were set for a weaker opening when trading commenced later Monday.

With US economic growth slowing, analysts fear recent losses in US stock prices could tip the the world’s leading economy back into recession.

Batstone said the main worry was that with US interest rates having already been slashed last year to the lowest level for 40 years, the US Federal Reserve now had little room for manoeuvre.

Weaker-than-expected German wholesale sales data added to fears that the world economy could be heading back into recession, but failed to dent sentiment towards the euro.

Germany’s Federal Statistics Office said earlier wholesale sales fell by 1.8 per cent in August from the previous month, leaving them 6.3 per cent down on a 12-month basis.

Meanwhile, the yen was boosted earlier Monday by news that the head of Japan’s Financial Services Agency, Hakuo Yanagisawa, was to leave his position.

He was seen as the key opponent of injecting funds into the banking sector, and the impact of his demotion has been to trigger yen buying, said Halifax chief currency strategist Steven Pearson.

Bank of Tokyo Mitsubishi analyst Derek Halpenny agreed.

Yanagisawa’s removal from office was a clear indication that the (Junichiro) Koizumi administration has changed its stance over the need for a public fund injection into the Japanese banking sector, Halpenny said.

The euro was changing hands at 0.9853 dollars against 0.9807 late on Friday in New York, 119.97 yen from 120.19, 0.6295 pounds (0.6282) and 1.4608 Swiss francs (1.4641).

The dollar was being quoted at 121.79 yen (122.53) and 1.4835 Swiss francs (1.4926).

The pound was at $1.5647 (1.5603), 190.60 yen (191.23) and 2.3201 Swiss francs (2.3295).

On the London bullion market, the price of an ounce of gold rose to $322.45 from 320.05 late on Friday. —AFP