CURRENCY : Dollar Slides in Shortened Session
The dollar tumbled against most major currencies in New York, pressured by concerns over the federal budget agreement in a quiet session cut short by the Columbus Day holiday.
Most currency trading ended by 1 p.m. EDT, when trades in currency futures shut down. Most of the dollar’s losses occurred in Asia and Europe before the start of U.S. trading.
Against the Japanese yen, the dollar sank to 130.48, down from 132.20 Friday. Early today in Tokyo, the slide continued, as the dollar hit 129.10 yen.
“The yen was probably the strongest currency today, along with the pound,” said Achilles Macris, currency trader at Chase Manhattan Bank. “The yen was catching up with gains already made by other currencies.
An anticipated drop in U.S. interest rates is driving traders to favor other currencies over the dollar. Lower rates are expected to make U.S. investments--and thus the dollar--less attractive to world investors.
The British pound was boosted by its official entry into the European exchange rate mechanism, a semi-fixed grid that cuts volatility. The pound soared to $1.974, up from Friday’s $1.945.
Against the German mark, the dollar ended at 1.532 versus 1.547 Friday.
CREDIT: Short-Term Issues’ Prices Rise Abroad Bond prices were mixed Monday in light holiday dealings.
U.S. Treasuries changed hands only overseas, as domestic government bond markets were closed for the Columbus Day holiday.
The Treasury’s benchmark 30-year bond fell 9/32 point, or $2.81 per $1,000 in face amount. Its yield rose to 8.81% from 8.78% Friday.
Short-term government issues rose while intermediate-term and long-term bonds fell. Credit market analysts said that reflected nervousness about investing in longer-term bonds until the federal budget impasse was resolved.
Prices of short-term governments rose 1/32 point to 1/16 point, intermediate maturities fell 3/32 point to 7/32 point and long-term issues lost about 1/4 point, according to Telerate Inc.
Federal funds quotes weren’t available because the Federal Reserve was closed for the holiday.
COMMODITIES: Harvest Slowdown Fuels Soybean Rise Prices of soybean futures soared as much as 17 cents a bushel Monday on the Chicago Board of Trade amid heavy speculative buying spurred by harvest delays in the soggy Midwest. Grain futures also advanced.
On other commodity markets, energy futures rose, precious metals were mixed, pork futures fell sharply and cattle were mixed.
Soybeans settled 5.25 to 17 cents higher, with the contract for delivery in November up 17 cents at $6.34 a bushel; October soybean meal surged $8.40 to $191.80 a ton.
Soybean futures opened modestly higher and climbed gradually until about an hour before the close, when sudden strength in the soy meal market sparked rounds of buying by chart-based speculators, analysts said.
In the metals markets, October gold futures on New York’s Commodity Exchange rose $1.30 to $394.40 an ounce, following oil prices. October silver inched up just 0.3 cent to $4.67.
