//www.ananova.com//The dollar was choppy in midmorning on caution ahead of the September 11 anniversary, with the US government warning of possible further attacks by extremists, dealers said. They added that investors are also waiting for further comments from US President George Bush on whether he will go ahead with a war against Iraq. Revised second quarter GDP figures for Japan released this morning beat market expectations, helping to push the dollar lower, though dealers said the impact was difficult to isolate given the volatility of the dollar/yen.
Sentiment remains generally dollar positive, which helped to push the dollar higher in early trade, after further gains on Wall Street and with concerns over the economies in Japan and Europe, they said. "The market's basically quiet and thin ahead of the anniversary and Bush's speech at the UN," said Hideki Naito, managing analyst at MMS, noting the dollar is caught in a range of 117-121 yen.
"Already the dollar has reverted (higher) so - if nothing happens - some further dollar buying may appear, but maybe not strongly," he said. The GDP "maybe pushed (the yen slightly higher) but this morning's moves in the dollar/yen are very choppy so it's very difficult to say if it's due to that," Naito said, noting the reversal of earlier gains in the dollar.
"The US market rebounded for three business days and the non-farm payrolls was better. Still the Japanese stocks are struggling to find a base so initially we saw some short-covering of the US dollar," he said. "Japanese exporters will continue to sell above 120 yen and towards the end of the month there may be some repatriation of coupon payments on US Treasuries and redemption of corporate samurai bonds," Naito said. The euro continues to look weak after its previous failure to regain parity against the dollar, he said, adding that the currency will likely be supported around the 96 cent level. Investors "tried to boost the euro towards parity and failed so residual euro-long positions were intermitently liquidated."
Dollar
yen 119.70 down from 119.90 119.58
sfr 1.4969 up from 1.4965 1.4990
Euro
usd 0.9752 down from 0.9756 0.9736
stg 0.6269 down from 0.6271 0.6270
yen 116.73 down from 116.96 116.40
sfr 1.4597 down from 1.4599 1.4590