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Dollar stays firmer

NEW YORK: The dollar firmed at US midday with the market riveted on possibilities for a German official rate cut Thursday.

Uncertainty over whether the Bundesbank will ease paralyzed the dollar in a tight range throughout the morning.

Some traders say expectations for German easing were heightened by a six basis-point trimming of the repo rate and by Bundesbank president Hans Tietmeyer's comments Tuesday.

At midday, the dollar stood at 1.4815/20 marks, up from 1.4787/92 at the open and at 96.41/51 yen versus 96.20/25 at the open.

Bundesbank President Hans Tietmeyer told a Japanese newspaper Tuesday further German interest rate cuts would depend on inflation and money supply developments. German M3 data showed a surprising contraction on Tuesday.

In late morning, dealers said shifting of portfolios by Asian central banks and some short-covering boosted the buck.

In other trade, the dollar was at 1.2251/56 Swiss francs, up from 1.2230/40 at the open and at Canadian $1.3580/85 versus $1.3575/80 at the open.

Sterling changed hands at $1.5413/23 down from $1.5390/95 at the open.-Reuter