16 February 2005, 09:28  Forex Points: US Market Update

The dollar fell against the majors in New York as traders sold the greenback following the release of the US Treasury International Capital Flows (TIC) data.
Dollar bulls suffered a set back despite slightly better TIC data of $61.3 billion in December, as the market reacted to the less encouraging components of the release. The Japanese sold over $3.1 billion worth of treasuries in December, which made a negative impact on the greenback given Japan's status as the world's largest holder of the US treasury debt. Caribbean holdings also decreased indicating heavy selling by the offshore hedge funds as many of such investment vehicles are registered on the Cayman Islands. The global shift in the sentiment towards US government debt may have a profound impact on the dollar as large holders such as Japan may continue to dump the US debt, further weakening the dollar.
The US dollar was quoted at 1.3017-20 against the euro, 1.8946-51 versus the British pound and 104.45-49 against the Japanese yen at 23:00 GMT.
Wall Street stocks gained as more news of mergers and acquisitions kept investors in the markets.
The Dow Jones Industrial Average added 0.4 percent to 10,837.17. The Standard and Poor's 500 index was up 0.3 percent at 1,210.09 and the NASDAQ Composite higher by 0.3 percent to 2,089.21.
Circuit City Stores rallied 16.1 percent to $16.53 after the electronics retailer said it received a bid from Highfields Capital Management.
Federated Department Stores gained 1.3 percent to $57.99, while May lost 0.6 percent to $32.05 after the merger talks between the retailers fell apart.
AMX Corp gained 4.9 percent to $22.38 after the company agreed to a takeover offer made by the Duchossois Industries
Apple Computer added 4.5 percent to $88.41 after an analyst upgrade. Fresh Del Monte Produce gained 4.6 percent to $32.despitre a fall in profits.
Performance Food Group shares tumbled 14.2 percent to $25.19 it would delay its earnings results due to an informal probe by the regulators.
The NYMEX crude oil future for March delivery gained 4 cents to $47.40 per barrel as traders remained on the sidelines ahead of the weekly EIA oil inventory update.
COMEX gold futures contract for April delivery lost 20 cents to $427.10 despite dollar's sharp decline against the majors in New York.
US treasuries fell after the widely followed JPMorgan's weekly client survey revealed that their clients' long bond positions had been reduced to zero from 7 percent since the last week for the first time in 13 months. The 10-Year Treasury Notes fell ? of a point to 99 5/32 pushing the yield up by 3 basis points to 4.10 percent. The 10 Year Treasury Note futures contract fell by 0.05 to 112-18.

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