LONDON, April 15: The dollar gained ground against other major currencies Tuesday on hopes of more positive news from a series of upcoming US corporate earnings reports, but gains were limited by fears over US tensions with Syria.
The single European currency weakened to $1.0749 from 1.0770 late on Monday in New York.
The dollar rose to 120.65 yen from 120.30 on Monday.
Gains were tempered by worries that with the US-led war in Iraq now seemingly over following the seizure of Tikrit, deposed Iraqi leader Saddam Hussein’s home town, Washington could soon be setting its sights on Syria.
Although falling short of threatening military action, US officials warned the Damascus regime Monday that it could face diplomatic and economic sanctions amid reports Syria has accepted fleeing Iraqi officials.
Gone is the brutal dictatorship of Saddam Hussein. Next, hopefully, is a re-examination by Syria and, perhaps, others about how they conduct their affairs, said White House spokesman Ari Fleischer.
WestLB analyst Michael Klawitter said Tuesday: No one is really expecting the US to go to war with Syria, nevertheless there is a little bit of uncertainty towards US policy in the Middle East.
With trade generally winding down ahead of the long Easter weekend, dealers needed few incentives to play it safe and avoid taking exposed positions, he added.
When the market has no clear direction, this (the issue of Syria) adds another reason not to move, he said.
On the other hand we have seen some better-than-expected corporate reports — from a very low level of expectation — and this is an upside.
The US first-quarter earnings reports season got off to a stronger-than-anticipated start on Monday as financial giants Citigroup and Bank of America posted improved profits.
The positive mood was maintained later as computer colossus IBM reported first quarter profits up 16.1 per cent.
With a swathe of other reports due before the Easter break, traders were hopeful the dollar could be pushed upwards some more.
Further corporate earnings results today and tomorrow (Tuesday and Wednesday) will dominate the market, said Derek Halpenny, a currency strategist with Bank of Tokyo-Mitsubishi.
WestLB’s Klawitter added: In the near term at least there is probably some dollar strength emerging.
The euro was changing hands at $1.0749 from 1.0770 late on Monday in New York, 129.66 yen (129.55), 0.6846 pounds (0.6840) and 1.4994 Swiss francs (1.4962).
The dollar was being quoted at 120.65 yen (120.30) and 1.3951 Swiss francs (1.3891).
The pound was at $1.5701 (1.5735), 189.41 yen (189.29) and 2.1896 Swiss francs (2.1857).
On the London Bullion Market, the spot price of an ounce of gold fell $2.30 from the previous closing price to $323.65 per ounce. —AFP
