Sun, Apr 17, 2005 - Page 10 News List

US dollar falls back against most major currencies


The dollar fell back on Friday against most major currencies despite a stronger-than-expected report from the Treasury Department on US capital flows.

The dollar's retreat eliminated the gains which had taken the US currency to a two-month high versus the euro on Thursday.

Overall, the dollar has been floating up and down in a fairly narrow range versus the euro and the yen since the start of last week. Friday's move meant the dollar closed lower versus the euro from seven days earlier for the first time in five weeks.

Late afternoon, the euro was at US$1.2922 from US$1.2817 late Thursday. The dollar was at ?107.76 from ?108.11 and at 1.1999 Swiss francs from SF1.2155.

The pound was at US$1.8919 from US$1.8812 and the euro was at ?139.29 from ?138.56.

The dollar's retreat came as the International Monetary Fund/World Bank spring meeting got underway in Washington. Senior officials from the Group of Seven industrialized nations sat down for discussions over the weekend.

In comments on Friday, US Treasury Secretary John Snow upped the pressure on China over its effective dollar peg.

Snow said the two sides have been in discussions for the best part of two years on the currency issue and that China had said it needed time to shore up its financial system before it made changes.

"They are there now. They have made enormous strides in fixing their financial infrastructure ... It's time for the Chinese to move to a flexible currency," he said.

Snow's comments follow similar remarks on Thursday from US President George W. Bush. China is not sending its top officials to the G-7 meeting, in what some in the market have described as a sign of its dislike of being pressed on the currency issue.

The dollar initially rose during the overnight session, lifting toward the two-month high against the euro it tapped Thursday. Asian equities and a below forecast Japanese consumer confidence reading helped the US currency. The data was just the latest in a long series of weak Japanese numbers.

The US dollar was trading at C$1.2466 late in New York from C$1.2420 late a day ago.

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