Treasury Secretary John Snow gave the dollar a modest boost Monday by reaffirming Washington's commitment to a strong US currency during the first stop of a four-nation European tour. Speaking in Dublin, Snow declined to discuss intervention to arrest the dollar's slide, saying currency values are best determined by open, competitive markets.
The euro pulled back to 1.2975 against the dollar after approaching its all-time high of 1.3005, reached the previous week. ECB board member José Manuel González-Páramo added pressure on the single currency, warning that "excessive" euro-dollar volatility had knocked Europe's economic recovery off track.
Analysts were largely unconvinced that Snow's remarks signaled any change in direction for Washington. A report in Japan's Nikkei newspaper suggested the US administration tacitly welcomed a weaker dollar, leaving Tokyo's Finance Ministry with scant political room to intervene. The dollar was trading at 105.26 yen, below the 106 level many had pegged as a potential intervention threshold.
The pound also weakened on speculation that an upcoming Royal Institution of Chartered Surveyors housing report, due Tuesday, would show the UK property market cooling under the strain of higher borrowing costs, reducing the case for further British rate increases.
Historical summary. TurkishPress restated this AFP wire report, first published in November 2004, in its own words.