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		Home Page Mortgage News You Can Use Dollar Weak as High-Yielders Hold Court By Sonali Desai, 2/11/2004 SINGAPORE (Reuters) - The U.S. dollar was hovering near its session lows on Wednesday but a holiday in Japan and wariness ahead of Federal Reserve Chairman Alan Greenspan's congressional testimony kept flows to a minimum in Asia. Dealers said its prospects remained bleak, with high-yielders such as the Australian dollar and sterling still firmly in favor after hitting multi-year peaks overnight. The dollar was at 1.2705/12 to the euro at 1:12 a.m. EST against $1.2696 late in New York, where it struck a one-month low of $1.2788 per euro. "There's a bit of nervousness around that Greenspan may sound more 'hawkish' than he has in the past," said Jo Masters, strategist at Macquarie Bank in Sydney. "The Fed are still walking a fine line, trying to talk up recovery without implying imminent rate hikes." The Fed chief delivers his two-part semi-annual monetary policy testimony to the House of Representatives at 11 a.m. EST, and to the Senate on Thursday. His comments will be scrutinized for clues on the likely timing of the next U.S. rate increase, with recent weak jobs data giving markets some pause after a change in the wording in the Fed's last policy statement sparked speculation of an earlier-than-expected increase. Bhanu Baweja, strategist at UBS in Singapore, said the dollar could get a short-term boost if Greenspan hinted at an earlier tightening, but noted that its weakness was very much a function of foreign investors' unwillingness to fund the U.S. current account deficit. "Any comments by Greenspan on government spending (which relates directly to the current account deficit), its sustainability and the challenges it presents for monetary policy could potentially be much more important," Baweja wrote in a daily research note. Analysts said any concern about imminent coordinated action to halt the dollar's decline had faded after a bland weekend statement by Group of Seven finance chiefs warning against excess volatility in foreign exchange markets. "The G7 meeting simply gave people the opportunity to find better levels to sell dollars," said Mike Moran, economist at Standard Chartered Bank in Hong Kong. Sterling remained well bid at $1.8700/05 after hitting an 11-year high of $1.8734 overnight. "Sterling remains attractive given the recent rate hike and expectations of another one in the next few months," Moran said. Attention will be focused on the Bank of England's latest quarterly report later in the day for clues on how soon the Monetary Policy Committee might raise rates again after last week's quarter point rise to 4.00 percent. Against the yen, the dollar was confined to an even tighter 105.30-105.80 yen range, sandwiched between expectations of Bank of Japan intervention and exporter dollar offers. © Copyright 2004 Reuters. Reuters content is the intellectual property of Reuters or its third-party content providers. Any copying, republication, or redistribution of Reuters content, including by caching, framing or similar means, is expressly prohibited without the prior written consent of Reuters.   Back to Original Article: Mortgage News You Can Use   Continue with: More job searchers just quit looking Heating bills, pump prices shock consumers Greenspan Says `Prospects Are Good' for Sustained Growth in U.S. Economy Yield declines on Treasury notes That Big Fat Budget Deficit. Yawn. Dow Soars 66 After Greenspan Report Experts: Bush Jobs Forecast Optimistic Dollar to hit US import prices eventually-Greenspan U.S. Treasuries Economic growth fuels stronger world oil demand-IEA Dollar Drops on Greenspan Remarks
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