FOREX-Dollar resumes fall on U.S. economic worries
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LONDON, March 25 (Reuters) - The dollar fell broadly on Tuesday, snapping a four-day string of gains, as investors' worries about U.S. economic health gnawed at sentiment.
The greenback had rallied in the lead-up to the Easter break last week after a steep bout of profit-taking in commodity markets saw investors retreat to cash.
Those gains were extended on Monday as JPMorgan (JPM.N) raised its offer for Bear Stearns BSC.N fivefold to about $10 a share, helped also by data showing existing U.S. homes sales rose in February.
But doubts about the overall outlook for the U.S. put investors back in sell mode due to scepticism about the chances of a sustained recovery despite aggressive Federal Reserve efforts to boost liquidity in the financial system.
"Essentially what we now know is that the market is in a range of $1.50-1.60. We're still in an environment of dollar weakness and if we're looking for a turn in the dollar we still don't have all the ingredients in place just yet," said Mansoor Mohi-uddin, chief currency strategist at UBS in Zurich.
The supportive tap of cash from profit-taking in commodities had also slowed as gold prices XAU= bounced, but oil was still depressed near $100 a barrel CLc1.
By 1122 GMT the euro was up 1 percent on the day at $1.5587 EUR= after falling as low as $1.5341 in the previous session. The single currency is down roughly 1.9 percent from last week's record high of $1.5904, but still up 6.8 percent on the year to date.
European rhetoric about the euro's recent climb also continued with comments from ECB Vice-President Lucas Papademos who said that recent moves in exchange rates had been excessive [ID:nFAT004042].
The dollar was down 0.15 percent against the yen at 100.50 yen JPY=, erasing earlier gains to above 101 yen. The dollar also fell 0.7 percent to 1.0109 Swiss francs.
The dollar tumbled to a record low against the euro and a 13-year trough of 95.77 yen last week when the announcement of Bear Stearns' takeover at a rock bottom price stoked fears that other major financial firms could be casualties in the crisis.
HIGHER YIELDERS RISE
High yielding currencies performed strongly, drawing support from rising stock markets, with Japan's Nikkei share average .N225 jumping 2.1 percent and European stocks surging 3 percent.
The New Zealand dollar was up 1.5 percent at $0.8040 NZD= while the Australian dollar rose 0.9 percent to $0.9147 AUD=. Continued...
