New York, March 7 (BridgeNews)
The greenback was vaulted to a 20-month high of 120.25 yen following official comments from Bank of Japan Governor Masaru Hayami and Finance Minister Kiichi Miyazawa. Hayami alluded to the theoretical possibility of "massive depreciation of the yen" as a means of kick-starting the economy, while Miyazawa said that natural yen weakness would be acceptable.
* * * Dollar/yen's gains vaulted euro/yen to a seven-week high of 112.31, but failed to help euro/dollar, which fell into negative territory from a five-day high of 0.9371. Dollar/Swiss franc opens virtually unchanged just below 1.6500.
Dragged down by euro/sterling, sterling/dollar fell to a five-day low of 1.4632, but remains stubbornly within Friday's range. Dollar/Canada posted modest gains within Tuesday's perimeter.
The Australian dollar fell to a three-and-a-half month low of 0.5125 and is threatening to set record lows below 0.5075 following a cut in the official cash rate by 25 basis points and a weaker-than-expected economic growth report.
The RBA lowered the official cash rate to 5.50% from 5.75%.
The domestic event agenda is focusing on speeches by Federal Reserve Chairman Alan Greenspan and Federal Reserve Bank of Dallas President Robert McTeer, and on the release of the Beige Book. The U.S. Federal Reserve Chairman Alan Greenspan will not appear in person before the Independent Community Bankers of America meeting in Las Vegas as previously scheduled, due to a "bad head cold." Instead, Greenspan will speak to the group via satellite. The U.S. traders are likely to try taking dollar/yenhigher.