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		Home Page Mortgage News You Can Use Greenspan provides fuel for dollar decline By Anusha Shrivastava, AP Business Writer, 2/11/2004 NEW YORK -- The dollar fell against most major currencies Wednesday on comments by Federal Reserve Chairman Alan Greenspan expressing little concern over the U.S. currency's recent decline. The dollar dropped as low as $1.2838 per euro, nearing its record low of $1.2898 reached last month. In late New York trading, the euro was quoted at $1.2809, up from $1.2710 late Tuesday. The British pound rose to an 11-year high of $1.8877. In late New York trading, the pound settled at $1.8872, up from $1.8709 late Tuesday. In delivering the Fed's monetary report to Congress, Greenspan said the dollar's decline over the last year has been "gradual" with "no material adverse side effects" to the economy or financial markets. "The markets were anticipating a more hawkish statement from Greenspan," said David Gilmore, who is a partner at Essex, Conn.-based Foreign Exchange Analytics. Michael Woolfolk, senior currency strategist at the Bank of New York, said Greenspan had "effectively endorsed" the view of U.S. Treasury Secretary Snow that the decline in the dollar is not an immediate concern since it has not been disorderly. In addition, Greenspan repeated the central bank's recent pledge to be "patient" in keeping interest rates at a 45-year low to ensure that the U.S. economic rebound takes hold. Higher rates make dollar-denominated investments more attractive to investors. "This effectively douses the market's impression that rates would go up," said Sean Callow, currency strategist at IDEA, a New York-based global financial research firm. Analysts said Greenspan's comments could cause the dollar to fall to new lows in coming weeks. "Greenspan was the last barrier in front of 1.30," Gilmore said. Woolfolk agreed, saying he expected the market to test the $1.30 per euro level "before the week is out." "The fear of coordinated intervention led by the ECB (European Central Bank) and supported by the U.S. Treasury looks remote as best, particularly after this past weekend's tepid G7 statement cautioning against excessive movements and disorderly markets," Woolfolk said. The dollar was quoted at 105.37 yen, down from 105.56 yen late Tuesday. Woolfolk said it was "generally understood" that the Bank of Japan continues to intervene to prop up the dollar: "I'd be surprised to see them let go of the 105 level." Against other currencies, the dollar was quoted at 1.2309 Swiss francs, up from 1.2346; 1.3176 Canadian dollars, down from 1.3306 and 10.9970 Mexican pesos, down from 11.1220.   Back to Original Article: News You Can Use   Continue with: Dollar, gold mixed in Europe U.S. Treasury Bond Prices Higher
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