October 22, 2003	Wednesday	Sha’aban 25, 1424

LONDON, Oct 21: The dollar drifted lower against the euro and yen on Tuesday as dealers awaited fresh impetus from economic and corporate news.

The single European currency edged ahead to $1.1642 in early European trading from 1.1631 late on Monday in New York.

The dollar eased to 109.91 yen compared with 110.40 on Monday.

There was very little to whet the markets’ appetite with only second tier economic data on the agenda, said Bear Stearns strategist Steve Barrow.

The dollar is enjoying a temporary respite, but it is unlikely to last for long as the currency fundamentals remain just as negative over the medium term, he added.

A brief shot in the arm for the dollar from US Treasury Secretary John Snow’s reported remarks a day earlier that US interest rates were set to rise, and that Washington had not been trying to talk down the value of the dollar, had largely worn off, analysts said.

Economists noted that Snow has no influence over US interest rates, which are set by the Federal Reserve, while the US administration still appears happy to see a weaker dollar.

The (US) government’s benign/ malign neglect towards a weaker dollar should be taken as read, with the government looking for any means possible to boost recovery and jobs in the run-in to the next election, said Barrow.

Many dealers were sitting on their hands ahead of a slew of US company results this week, including Amazon.com on Tuesday, AOL Time Warner on Wednesday and Lucent Technologies on Thursday.

Should the US equity market take a cue from positive earnings results overnight, the dollar could take on a stronger tone against European currencies, said ABN Amro analyst Paul Mackel.

The euro was changing hands at $1.1642 from 1.1631 late on Monday in New York, 127.94 yen (128.42), 0.6965 pounds (0.6959) and 1.5534 Swiss francs (1.5501).

The dollar was being quoted at 109.91 yen (110.40) and 1.3346 Swiss francs (1.3323).

The pound was at $1.6716 (1.6703), 183.71 yen (184.46) and 2.2306 Swiss francs (2.2261).

On the London Bullion Market, the price of an ounce of gold stood at $374.95 against 373.80 on Monday afternoon.

MUMBAI: The Indian rupee rose on the back of strong investment and trade inflows on Tuesday, but was pulled off the day’s high by central bank intervention.

The currency closed at 45.33/34 per dollar, off the high of 45.28 though above Monday’s 45.36/37.

Inflows were good. There were export remittances and foreign fund investments, but state-run banks absorbed these flows buying dollars from 45.28 to 45.35, said a trader at a state-run bank.

The central bank has intervened to moderate the rupee’s rise and protect the country’s trade competitiveness.

The dollar traded at a small premium in the forward market as a surplus of dollars, prompted traders to sell spot and buy later to hold higher-yielding rupees in the interim.—AFP/Reuters