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DJ Euro Pushes Well Above $1.22, Dollar Falls Under Y118(Comtex Finance Via Thomson Dialog NewsEdge)NEW YORK, Apr 17, 2006 (Dow Jones Commodities News via Comtex) --The dollar is sharply lower early in New York Monday, coming under pressure overnight after reports fueled concerns that China could reduce its buying of U.S. Treasurys and that the U.S. may finish its rate hike cycle sooner than expected. The euro pushed above $1.22 mark for the first time in 10 days early in New York, while the dollar fell under the Y118 mark for the first time in a week. At 8:15 a.m. EDT, the euro is trading at $1.2234 from $1.2114 late Friday in New York, according to EBS. The dollar is at Y117.90 from Y118.66, and at CHF1.2835 from CHF1.2985. Sterling was at $1.7675 from $1.7512, while the euro was at Y144.27 from Y143.71. Dollar selling was prompted by reports in Chinese state-owned newspapers Monday that quoted Cheng Siwei, vice chairman of the Standing Committee of the National People's Congress, as saying China should reduce the quantity of U.S. Treasurys that it purchases. This is particularly relevant as markets grow more and more concerned over global imbalances and as the U.S. Treasury will announce its monthly Treasury International Capital System flows data at 9:00 a.m. EDT. Market watchers say the dollar could fall further if the data show that inflows into the U.S. fell short of the U.S. trade deficit for a third consecutive month in February. TICS flows are estimated to have contracted to $61.4 billion, below February's U.S. trade deficit of $65.7 billion and smaller than January's inflows, which totaled $66.0 billion, according to the average forecast of economists surveyed by Dow Jones Newswires. Analysts also said that dollar selling was supported by an article in the Wall Street Journal suggesting not all Federal Reserve officials are convinced that much more monetary tightening is required. The sell-off in the dollar reveals some of the sensitivity in the relationship between the U.S. and China, and comes ahead of Chinese President Hu Jintao's visit to the U.S. on Thursday. The yuan ended down slightly, and some analysts suspect it will drop a bit more ahead of Hu's visit. -By Azam Ahmed, Dow Jones Newswires; 201-938-2245; [email protected] (Natasha Brereton in Tokyo contributed to this report.) (END) Dow Jones Newswires 04-17-06 0833ET |