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		Home Page News You Can Use Dollar Down Across Board By Mariko Hayashibara, 2/17/2004 TOKYO (Reuters) - The dollar fell across the board on Wednesday as investors snapped up higher-yielding currencies, but the yen failed to gain on surprisingly robust growth data amid market suspicions that Japan had intervened. Against the dollar, the euro hovered just below a record high, sterling hit a fresh 11-year peak and commodity currencies such as the Australian and New Zealand dollars tested new seven-year highs. The Japanese currency, meanwhile, fell to the day's low versus the dollar on suspected yen-selling intervention by the Japanese authorities. They are believed to have stepped in to the market shortly after the release of Japan's gross domestic product (GDP) figures for the fourth quarter. "The GDP data was much stronger than the market had expected, but the market is having difficulty selling the dollar versus the yen on spreading talk about dollar bid orders near 105.60 yen," said Yoshihiro Nomura, forex section manager at Trust & Custody Services Bank in Tokyo. "The focus now is on how overseas investors will react to Japan's robust data." The dollar was trading around 105.70 yen at 10:03 p.m. EST Tuesday, near the day's high of 105.75 yen and up from 105.60 yen in the late New York session. The euro was at $1.2860 inching closer to its record high of $1.2899. Sterling surged to $1.9098 a new 11-year high as investors snapped up high-yielding currencies on fading prospects of an interest rate increase in the United States. The pound also rose against the yen to a new five-year high around 201.80 yen Britain's key interest rate stands at 4.0 percent while the U.S. official rate is 1.0 percent. Dealers said sterling's bullish outlook was helped by news that Britain's Vodafone had withdrawn from a multi-billion-dollar auction for U.S. firm AT&T Wireless, which had been seen as creating an inflow to the dollar from sterling. Cingular Wireless' successful bid for AT&T Wireless was expected to give Japan's NTT DoCoMo $6.5 billion in cash for its 16 percent state in the U.S. company. Dealers said this might lead to fund inflows to yen, as DoCoMo has been taking a more conservative approach in overseas investment over past few years. ROBUST GROWTH Government data showed the Japanese economy expanded by a bigger-than-expected 1.7 percent in October-December from the previous quarter, beating economists' expectations for an expansion of 1.1 percent. On an annualized basis, GDP grew a real 7.0 percent, compared with a median forecast of 4.6 percent and nearly double the 4.0 percent expansion in the United States in the same period. Analysts said the data would likely give a boost to the yen in the long term and Japan may find it hard to justify stepping in to sell the yen. "The government may find it difficult to intervene in the currency market, given its case for such action -- that the yen should not strengthen when economic fundamentals are weak -- could be weakened," said Norihiro Fujito, senior investment strategist at Mitsubishi Securities. Japanese officials, meanwhile, were busy warning the market that excessive appreciation of the yen was threatening economic recovery. Finance Minister Sadakazu Tanigaki said on Wednesday that it was too early to say that Japan had dug itself out of deflation, adding that the government had not changed its policy of intervening in the market to stem volatility. Economic Minister Heizo Takenaka and Deputy Bank of Japan Governor Kazumasa Iwata both said that sharp moves in the dollar/yen exchange rate were a big risk for the Japanese economy. Looking ahead, the market was awaiting Germany's producer prices index for January due at 2 a.m. EST and U.S. Housing starts for January at 8:30 a.m. EST for clues on whether to push up the euro further.   Back to Original Article: News You Can Use   Continue with: Two banks offering small businesses free checking Who are those guys? Google expands Web index as Yahoo begins to cut ties with longtime partner Small-Caps Still a Good Long-Term Buy World economic climate best since '00-Ifo/ICC poll Econ Team Argues Bush Policies To Create Jobs Japan economy surges in Oct-Dec on strong exports Unchecked euro rise would hit recovery-German banks
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