Dollar down in tight range trading
NEW YORK (AP) _ The dollar fell moderately Tuesday as some traders took profits from Monday’s rise and others held off buying ahead of U.S. inflation statistics later in the week.
Traders said the dollar remained in a fairly tight range with little news to justify big moves.
In late New York trading, the dollar was quoted at 113.41 Japanese yen, down from 113.51 late Monday. The dollar was changing hands at 1.5524 German marks, down from 1.5575.
Monday’s rise was largely a recovery from the sharp fall Friday spurred by Federal Reserve Chairman Alan Greenspan’s question on whether U.S. stock markets were irrationally high.
Tuesday saw dollar trading detach from the stock market, which pushed higher for a second day in a row.
John Hazelton, chief currency trader at Manufacturers & Traders Trust Co. in New York said traders are uncomfortable holding large dollar positions after last week’s dip, accounting for the fact that Monday’s rise wasn’t sustainable.
``The bullish tone is abating a little bit as some of the buying demand gets met,″ he said.
``We’re definitely in range trading,″ said Ralph Delzenero, vice president, foreign exchange marketing at the First National Bank of Chicago. ``The market continues to buy dollars on dips.″
The U.S. government will release the November producer price index on Wednesday and the consumer price on Thursday. Economists are anticipating a moderate 0.3 percent growth rate in both figures, but some market participants were hesitant to buy before the numbers, said Tom O’Malley, senior foreign exchange analyst at Technical Data Co. in Boston.
Patrick Brodie, a trader with Sumitomo Bank Ltd. in New York, said the dollar’s fundamental strength in recent months helped it brush off Friday’s losses and stabilize.
``If the market were really that fragile, I think we would have seen it turn a lot lower on (Greenspan’s) comment. Overall the dollar still looks healthy going into year end.″
Dollar traders have said some of the currency’s strength stems from a feeling that European currencies should remain weaker as the continent approaches its single currency system _ in order to protect exports.
Other late dollar rates in New York, compared with late Friday: 1.3256 Swiss francs, down from 1.3283; 5.2470 French francs, down from 5.2590; 1,531.50 Italian lire, down from 1,532; and 1.3577 Canadian dollars, up from 1.3551.
The British pound was quoted at $1.6537, up from $1.6469.