Euro hype sidelines US dollar

PUBLISHED : Sunday, 03 January, 1999, 12:00am
UPDATED : Sunday, 03 January, 1999, 12:00am

THE world's attention has been focused on Europe where, after much fanfare and years of preparation, the euro was launched on New Year's Day - although it does not begin trading until tomorrow.

In the past week, trading volumes in US dollar/marks were thin as investors sat on the sidelines ahead of the euro launch.

Against the US dollar, the deutschemark bowed off the world stage at 1.668, compared with its previous week's closing of 1.6777.

The dollar fell 2.3 per cent against the yen last week and closed at 113.6 on Thursday after falling past the 113 level. The surge in Japanese government bond yields in the past two weeks has narrowed interest rate differentials and lured Japanese investors who have been selling yen to go for higher-yielding markets overseas.

Helen Ng is the head of private banking asset management at BNP Asset Management (Asia)