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WORLD FOREX

Dollar Falls Versus Yen, Euro On

Profit-Taking

TOKYO (Dow Jones)--The dollar declined against the yen and euro in Asia Thursday as players sold the U.S. unit to lock in profits after its overnight rise.

Players also sold the dollar in reaction to news that Russia and Brazil are planning to reduce their U.S. Treasury holdings in favor of new International Monetary Fund securities, dealers said.

Some traders also mentioned the continued rise in oil prices as a dollar-negative factor. The price of Nymex crude futures rose above $72 per barrel for the first time since October. "That hurts the dollar because it raises concerns going forward about inflation, and the U.S. would be in the weakest position to cope," given its massive fiscal stimulus spending and ultra-low 0-0.25% policy rate, said Yuzo Sakai, manager of foreign exchange business promotion at Tokyo Forex & Ueda Harlow. At 0450 GMT, the U.S. unit traded hands at Y97.77 compared to Y98.28 late Wednesday in New York. The euro stood at $1.4050 compared to $1.3987. Dollar weakness is likely to persist, some dealers said, citing growing concern that lingering weakness in U.S. domestic demand may postpone any overall economic recovery. "My gut feeling is that this is going to keep the dollar weak, at least until August or so," said Hideki Amikura, deputy general manager of Nomura Trust and Banking.

Most dealers agreed the U.S. unit is unlikely to make major breaks in either direction for the rest of the week. Into the weekend, it may trade in a Y96.50-Y98.50 band, while the euro may consolidate in a $1.3800-$1.4100 range, said Satoshi Tate, senior vice president of the foreign exchange division at Mizuho Corporate Bank.

Players are now watching U.S. May retail and food sales, due at 1230 GMT, to gauge conditions in consumer demand. Economists surveyed by Dow Jones Newswires forecast a 0.5% rise. Some dealers said a weaker-than-expected showing could further drag on the greenback.

Interbank Foreign Exchange Rates At 00:50 EDT / 0450 GMT
                       Latest     Previous   %Chg   Daily   Daily    %Chg
Dollar Rates                        2150 GMT          High    Low      12/31
USD/JPY Yen              97.75-81   98.13-17   -0.39  98.29   97.74    +7.89
EUR/USD Euro             1.4048-53  1.3981-84  +0.48  1.4060  1.3962   +0.50
GBP/USD Sterling         1.6423-25  1.6356-61  +0.41  1.6433  1.6342  +12.29
USD/CHF Swiss Franc      1.0757-66  1.0804-07  -0.44  1.0823  1.0756   +0.82
USD/CAD Canadian Dlr     1.1034-39  1.1075-81  -0.37  1.1102  1.1034   -9.30
AUD/USD Australian Dlr   0.8110-13  0.8036-38  +0.92  0.8121  0.8015  +14.66
NZD/USD New Zealand Dlr  0.6373-76  0.6269-74  +1.66  0.6376  0.6291   +9.22
EUR/JPY Yen              137.35-40  137.22-26  +0.09  137.66  137.13   +8.46