By Allen Sykora
July 20 (FNX News) - The U.S. dollar is softer against the major European currencies after selling set in against the Swiss currency just ahead of 1.73 francs, as well as nervousness ahead of any communique issued by Group of Eight (G-8) leaders, analysts said.
The dollar hit a high of 1.7298 Swiss francs overnight, but has since pulled back to a current level of 1.7190, down from the late-Thursday North American level of 1.7261.
The euro is at 87.65 U.S. cents versus 87.20 late Thursday, and sterling is at $1.4327, up from $1.4296.
"We hit some fairly large offers in dollar/Swiss just ahead of 1.73, and it absolutely collapsed," said Kerry Meanwell, London-based currency analyst with MCM. "That set the tone for the rest of the day."
In addition, speculation about the G-8 communique following a summit in Genoa, Italy, put some pressure on the dollar, Meanwell said.
"Ahead of that, a lot of people prefer to be short of dollars. I think the fear is there is going to be some reference which waters down the U.S. (strong-)dollar policy," she explained. "People who have traditionally been long in dollars have been scaling back. And that has led to some of the short-term guys holding short-term dollar positions.
"Unless dollar/Swiss makes clear gains above 1.73, people are going to be happy to hold these short-dollar positions."
In the run-up to the summit, U.S. manufacturing and farming organizations have been trying to pressure the Bush administration to stray from its strong-dollar policy in order to stimulate exports. Government officials have countered, however, by saying that there are also benefits to the policy, such as attracting foreign investment, and that they are inclined to let the market set foreign-exchange rates.