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Dollar holds steady

against yen

NEW YORK: The dollar held steady against the yen but eased versus the mark at midday as traders pondered the possibility that the Bundesbank may leave official German rates unchanged on Thursday, dealers said.

"There was a little euphoria earlier in the week that the cut was almost imminent", said Dieqo Giurleo, a vice president of the Treasury Department at Royal Bank of Canada. "Now the market is a little bit uncertain about it".

The dollar slid to 1.5060/70 marks at midday, down from 1.5071/76 at the open. It was at 108.25/30 yen, nearly unchanged from 108.23/30.

The Buba council meets on Thursday to discuss monetary policy. Only three of 15 German analysts polled by Reuters predicted Buba would cut interest rates at that gathering.

Meanwhile, Giurleo suggested that the dollar also eased because, even if the Bundesbank bank did cut rates, the expectation is already in the market.

Turning to the yen, he noted that the Japanese have started to turn the economy around and interest rates have bottomed out.

"So that's capped some of the upside on the dollar", he said. "Perhaps if the dollar does take off if Buba cuts, the Japanese yen won't react as much".

In other trade, the dollar stood at 1.2250/60 Swiss francs at midday, down from 1.2268/75 at the open.

Sterling stood at $1.5075/85, little changed from $1.5076/83 at the open. The dollar was at Canadian $1.3562/67, down from C$1.3579/84.-Reuter