9 September 2002, 16:31  Forex - Majors rangebound in midday London ahead of Sept 11 anniversary

//www.iqi.ru//Major currencies were little changed in cautious midday trade ahead of the anniversary of the Sept 11 terrorist attacks on the US later in the week, dealers said. "The currency markets are likely to trade sideways ahead of the Sept 11 anniversary," Will Rugg, senior currency strategist at Standard & Poor's, said. Fears of further attacks as this key date approaches is likely to result in nervous trade. The dollar remained well-bid after last week's stronger-than-expected US non-farm payrolls data. However, Kamal Sharma, currency strategist at Commerzbank said the dollar's rally was based on an incorrect reading of the jobs data. "The euro suffered on Friday because of a false interpretation of US economic data," Sharma said.
The fall in the US unemployment rate was due to a decrease in the pool of available labour as opposed to an increase in employment itself, he said. "There's still a lot of nervousness out there despite the strong payrolls on Friday," he said. Market players will be keen to see if US equities extend Friday's rally, as European bourses slid back into negative territory. Following Sept 11, the focus is likely to revert back to the looming US-led attacks on Iraq.
US president George W Bush's address at the United Nations General Assembly on Thursday will be closely watched. "He's going to be drumming up support later in the week," Rugg said. Key data is skewed towards the end of the week, with both US retail sales figures and the University of Michigan Index due on Friday. However, economists do not expect this week's data to have as much impact as last week's key releases. "This week's US data will have less impact on Fed thinking than last week's ISM and jobs report," economists at Bear Stearns said. August retail sales are likely to slow a little and consumer confidence will edge a little weaker, they said.
Federal Reserve chairman Alan Greenspan's testimony on Thursday will also be closely scrutinised for any hints of where interest rates are heading next. Ahead of this, the market is geared up to focus on the wider political scene and the escalation of the US war rhetoric. Meanwhile, sterling was lower after in-line UK PPI and trade data. UK August manufacturers' raw material costs rose a seasonally adjusted 0.4% from July, slightly below forecasts. Euro negative coverage in the weekend press helped to boost sterling in early trade, but later it took a cue from broad euro-dollar moves, Rugg said.

yen 118.84 up from 118.44
sfr 1.4878 up from 1.4868
usd 0.9804 down from 0.9826
stg 0.6284 down from 0.6294
yen 116.52 up from 116.36
sfr 1.4587 down from 1.4597

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