The dollar slid against the euro and yen on Friday after Federal Reserve Chairman Alan Greenspan told a Frankfurt conference that a decline in global appetite for dollar-denominated assets appeared inevitable, given the scale of America's current account imbalance.
The euro rose to 1.3056 dollars, near the record of 1.3074 reached the prior session. The yen strengthened to 102.89 per dollar, its highest point since April 2000. Gold settled at $445.60 an ounce, up roughly $3.60 on the day.
Analysts read the remarks as an endorsement of an orderly dollar decline rather than a warning. Treasury Secretary John Snow has held a similar view, and neither official signaled any interest in currency market intervention.
The European Central Bank and the Bank of Japan were both uneasy about how quickly their currencies were gaining ground, yet intervention before the G20 summit in Berlin was not expected. The ECB's last direct move in foreign exchange markets came in late 2000, when it bought euros after the currency fell to a record low of 0.8230 dollars. Analysts said any fresh ECB action would require cooperation from Washington.
Currency traders were cautious about pushing the dollar much further down ahead of the G20 opening on Saturday in Berlin, where foreign exchange was expected to feature prominently on the agenda.
Historical summary. TurkishPress restated this AFP wire report, first published in November 2004, in its own words.