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Will China''s gold craze give victory to real metal or just paper?
Dollar Crumbles to Record Low Vs. Euro
By Eric Burroughs
Reuters
Wednesday, December 1, 2004
http://www.reuters.com/newsArticle.jhtml?
type=businessNews&storyID=6972430
TOKYO -- The dollar sank to a record low against
the euro on Thursday and stood near a 12-year low
vs. the pound after a round of robust U.S. economic
data failed to dispel increasingly negative sentiment
on the U.S. currency.
The market was keeping an eye out for central bank
intervention after Japan's top currency policy official,
Hiroshi Watanabe, gave his clearest warning yet of
possible dollar-buying action.
Watanabe said on Wednesday that "conditions are in
place" for Japan and Europe to act jointly to support
the dollar and that other countries hurt by the falling
currency could join in any action.
But traders have repeatedly driven the dollar lower
despite verbal threats, waiting for a clear sign that
the currency's nearly 9 percent drop against the
euro and the yen in two months has gone too far
too fast for Japanese and European officials.
Reports showing accelerating U.S. factory growth
in November and a strong start to consumer
spending in the fourth-quarter did nothing to stem
the dollar's slide, despite bolstering expectations
for the Federal Reserve to keep lifting official rates.
By comparison, European data showed
manufacturing growth stalled last month and new
orders for goods contracting for the first time in
more than a year, with some economists blaming
the dollar's gains on the dent to exports. "Nobody
seems to care about the economic data," said
Marshall Gittler, senior currency strategist at
Deutsche Bank in Tokyo. "That indicator's
sentiment for the dollar is seriously, seriously
bearish."
Even a 1.5 percent jump in the S&P 500 Monday
to a new three-year high offered no solace for the
dollar.
The euro traded near a new record high around
$1.3370 in mid-morning Tokyo trade, up about
a third of a percent from the late New York level.
The Japanese currency climbed to around 102.30
yen per dollar, just off a 4-1/2-year high of 102.15
hit last week.
Against the euro, it was stable at 136.85 yen
Underscoring the dollar's widespread woes, the
U.S. currency stayed close to a 12-year low
against the pound of $1.9359, trading at $1.9340.
That takes sterling back to levels against the
dollar that were traded just before Britain was
ejected from Europe's Exchange Rate
Mechanism in 1992.
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