TOKYO, Oct 18: The dollar slipped in nervous trading on Thursday as investors fretted over fresh anthrax outbreaks with a speech by the US Federal Reserve chairman failing to provide new leads, dealers said.
The greenback was quoted at 120.93-95 yen down from 121.21-25 yen in New York and 121.60-63 yen in Tokyo late Wednesday.
The euro bought $0.9020-22 compared with $0.9033-37 in New York and $0.9046-49 in Tokyo late Wednesday.
The direction today is difficult to characterise on the fundamental side as it is very technical movement: everyday we get news from the US the anthrax makes everything uncertain, said HSBC foreign exchange manager Takeda Uda.
Nobody knows which direction to go, it is difficult to take the initiative right now, it is hard to make money, he said.
I don’t know how long this will go on, maybe until the end of the year, who knows what will happen. It makes the market more volatile and choppy. That makes us nervous.
No case of the deadly anthrax bacteria has been detected outside the United States but hoaxes and false alarms are keeping people on edge around the world as government scientists race to check suspicious mail and possible cases.
With such remarks, the chairman perhaps attempted to calm down over-rated expectations for additional and radical monetary easing, Sumitomo Trust and Banking Co. Ltd. chief customer dealer Jitsuo Tachibana said.
But while fundamentals-led play will eventually become a key driving force, market participants, for the time being, will continue to focus on the spread of the anthrax problem and developments in Afghanistan, Tachibana said.
Until the market begins to refocus on economic fundamentals, the dollar-yen is likely to continue to stay in the 120-122 yen trading range, dealers said.
Unless uncertainty over the future trend of the US economy is fully removed, people will remain hesitant to push the dollar to beyond the 122-yen level, seen prior to the September 11, attacks, said Tachibana.
On the downside, the dollar will continue to see some support at around the 120-yen level, unless the Afghan situation or terrorist attacks develop far beyond expectations.
The euro was also rangebound due to a lack of fresh trading leads, although DBS Bank in Singapore said in a report it was expected to make further gains against the dollar after Greenspan warned of uncertainties in the US economy.
We believe the odds are against the dollar and it will manifest itself more firmly in the second-half of 2002, the bank said.
Meanwhile signs of the spread of the anthrax problem to the euro-zone weighed on the currency’s top-side, dealers said.
Against the yen the European unit was quoted at 109.04 around 5:17 pm, against 109.44 in New York and 110.06 yen in Tokyo late Wednesday.
In late Singapore trade, the US dollar weakened to 51.645 Philippine pesos from 51.725 on Wednesday, 1.8137 Singapore dollars from 1.8183, 1,298.6499 South Korean won from 1,301.85, 34.5405 Taiwan dollars from 34.5460 and 44.695 Thai baht from 44.740.
The greenback firmed to 10,055 Indonesian rupiah from 10,008.—AFP