Newspaper article THE JOURNAL RECORD

Dollar Falls against Mark, Up vs. Yen

Newspaper article THE JOURNAL RECORD

Dollar Falls against Mark, Up vs. Yen

Article excerpt

NEW YORK (AP) _ The dollar weakened against the mark and other key European currencies Tuesday, hurt by uncertainty over U.S.-Japanese trade talks and political anxieties in France that increased demand for the German currency.

The dollar ended marginally higher against the yen in U.S. trading, but currency dealers said the volume of dealings was so light that it was difficult to attribute the dollar's behavior vs. the yen to any particular cause. A holidayshortened week in Japan and Europe suppressed the level of transactions.

"The thin volume makes people very reluctant to take big positions," said Guillermo Estebanez, a foreign-exchange economist at Bank of America in San Francisco. "There can be big costs if you take the wrong one."

By late afternoon in New York the dollar fetched 1.3777 marks, down from 1.3905 at the same time Monday. The dollar also fetched 83.60 yen, up from 83.50 yen late Monday.

Traders said a primary focus of speculation in the foreign-exchange market was the U.S.-Japanese meeting in Vancouver, British Columbia, over the swollen Japanese trade surplus in automotive trade.

Automotive goods account for about 60 percent of Japan's trade surplus with the United States. The surplus, which reached a record $66 billion last year, has been a key reason for the dollar's 16 percent drop in value vs. the yen so far this year.

The surplus means Japanese exporters hold huge amounts of dollars that they must sell for yen in order to repatriate profits. That selling floods the currency market with dollars and reduces the value of the U.S. currency.

U.S. Trade Representative Mickey Kantor and Japanese Trade Minister Ryutaro Hashimoto were supposed to confer Wednesday, and many traders expected some kind of announcement.

A Japanese retreat on U.S. demands for more open access to Japan's automotive market would benefit the dollar by alleviating the immediate threat of U. …

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