Dollar opens slightly higher in Europe

LONDON (UPI): The U.S. dollar headed higher yesterday in cautious trading against major foreign currencies as traders hedged bets against upcoming monetary policy meetings.

The United States, Germany and the United Kingdom will all meet this week to discuss their respective economies, while the Group of Seven will meet in Berlin Saturday.

Dealers said concern over a G-7 initiative to quell the dollar's rise caused some pull-back in the dollar/mark and dollar/yen rates.

Analysts also noted that traders feel uncertain about the Federal Open Market Committee's upcoming decision on raising U.S. interest rates after Friday's Gross Domestic Product statistics showed stronger than expected growth, but with low inflation.

In European trading, the dollar began the day stronger in Frankfurt at 1.6418 marks, up from 1.6390 Friday.

The dollar began the day higher in Zurich at 1.4238 Swiss francs, up from 1.4208. In Paris, the dollar opened higher at 5.5424 French francs, up from 5.5287.

The dollar opened firmer in Brussels at 33.87 Belgian francs, up from 33.79, and began the day higher in Rome at 1,619.50 Italian lira, up from 1,610.50 lira.

In London, the pound began the day lower at US$1.6004 compared with $1.6016 late Friday.

Earlier in Asia, the dollar eased in Tokyo to 121.54 yen from 122.13 as Japanese banks moved to settle their accounts at the start of the month.

Tatsuo Ogawa, deputy general manager of foreign exchange at Long-Term Credit Bank of Japan, said, "Despite such position consolidations, the dollar looks to be keeping its strength based on economic fundamentals."

Analysts said Tokyo traders also had concerns over the G-7 meeting.

"The United States is still seen as firm in its support for a strong dollar, but it might not stop such concerns by the Japanese and German sides," said Tatsuo Ogawa, deputy general manager of foreign exchange at Long-Term Credit Bank of Japan.

"Players are placing orders both for selling and buying the U.S. currency to stop losses and unwind their positions," said Watanabe.

Long-Term Credit Bank's Ogawa said, "After the rapid upsurge in the dollar, the market has been in a mood to sell long, or overbought, positions on the dollar, and take profits."

Elsewhere in Asia, the dollar eased in Singapore to S$1.4075 from $1.4082 and inched higher in Hong Kong to HK$7.7485 from $7.7475.

On the metals markets in Europe, gold opened $1.75 an ounce lower in London at $344.60. The London morning gold fixing was $343.75, off $2.50 from Friday's close.

In earlier trading in Asia, gold closed at $344.65 on the Hong Kong Bullion Exchange, off $0.15 from Friday's close.

Silver opened 1 cent lower in London at $4.90 an ounce.