960415

Dollar clings

above 1.51 marks

in bullish trade

TOKYO: The dollar was hovering above 1.51 marks in late Monday afternoon Tokyo trade after surging close to 1.5130 marks earlier in the afternoon, with market hopes of a German interest rate cut sparking buying.

Although the dollar was also firm against the yen, movements were more limited and bound within a narrow range, from around 108.60 yen to just under 109.00 yen.

"Trade today is definitely being led by the mark," one European bank dealer said.

Hopes for a German credit easing were fanned by statements on Saturday by Bundesbank President Hans Tietmeyer that he would welcome a lower mark.

"This normalisation process (of the mark exchange rate) has been going on for some time and has got an extra boost in recent weeks. I would welcome it if it went some steps further," Tietmeyer said. But dealers said it was hard to predict the actual chances of an easing by the German central bank's council meeting this coming Thursday.

"Despite many signs that this could be a good time for a rate cut, they may well wait until later, as once they cut rates there is little left for them to do strategically," the European bank dealer said.

A trust bank dealer said now the dollar had broken above the 1.5050 marks resistance to a 14-month high, its next points to challenge would be 1.5175 marks and then 1.5200 marks.

The European bank dealer said 1.5170 marks could well become heavy, but that sentiment overall remained bullish.

The mark was also sold off against the yen, slipping to around 71.92 yen from 72.18 yen at Friday's New York close.

Some of the selling had emerged as a result of stop-loss selling, which was triggered around 72.00 yen flat and possibly at just under that level as well.

The dollar was relatively sluggish in its moves against the yen, trapped between importer and possibly trust bank buying near 108.60 yen and selling near 109.00 yen from fund operators and exporters. Dealers said they detected resistance developing near 108.80 yen.

"The dollar is probably going to make a real try for 109 yen soon, a bit later this week. The question then is how much profit-taking will emerge," the trust bank dealer said.

Singapore dealers said they saw the greenback facing resistance at 109 yen and 1.5150 marks.

"There was no particular news for the upmove this morning but I would see it as follow-through buying from last Friday night," said a local bank dealer.

She said a decline in inflationary fears following subdued U.S. retail sales data and an undramatic consumer price index were underpinning dollar sentiment.-Reuter