24 February 2005, 09:35  Forex Points: US Market Update

The US dollar firmed against the majors today in New York as traders reversed their positions following the new statement from the Bank of Korea.
The Bank of Korea revealed today that it was not planning to reduce its US dollar holdings, as yesterday's misinterpretation of the original report sent the dollar tumbling against the majors. Japan sided with Korea, citing that the Bank of Japan has no plans to reduce its own holding of the dollar denominated assets, currently estimated to be approximately $720 billion. The latest comments from the Asian central banks gave greenback bulls much needed support.
US core consumer prices rose by 0.1 percent in January, reflecting Fed statements that inflation is well contained, setting the stage for the measured approach to interest rate hikes.
The US dollar was quoted at 1.3207-10 against the euro, 1.9072-77 versus the British pound and 104.93-97 against the Japanese yen.
Wall Street stocks recouped some of the yesterday's losses as investors were encouraged by the news that the US inflation is well contained.
The Dow Jones Industrial Average rose 0.6 percent to 10,673.79, and the Standard and Poor's 500 added 0.6 percent to 1,190.80. The NASDAQ Composite closed 0.1 percent higher at 2,031.25.
Technology stocks were in play as traders exited the sector. Intel lost1.9 percent to $23.31, while Advanced Micro Devices fell 2.4 percent to $16.60 followed by Texas Instruments slipped 0.4 percent to $25.47.
Motorola fell 0.9 percent to $15.42 after the cell phone manufacturer restated its fourth-quarter earnings.
Lowe's, the hardware chain, rose 0.6 percent to $57.90 after it reported strong quarterly earnings
Goodyear rose 6.7 percent to $14 after the company announced it expects to return to profitability during the next quarter.
The NYMEX crude oil futures contract for April delivery rose 22 cents to $51.20 per barrel ahead of the weekly inventory report.
COMEX gold futures contract for March delivery gained 30 cents to $436.10 per ounce.
The US treasuries rallied today after the government report showed that inflation was under control, diminishing the expectations of accelerated rate increases by the Federal Reserve. The 10 Year US Treasury Note gained 1/4 to 97 7/8 pushing the yield lower by 3 basis points to 4.26 percent. The 10 Year Treasury Note futures contract for March delivery gained 0.02 to 111.13.

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