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Dollar finishes firmer

against mark, yen in US

NEW YORK: The dollar ended the U.S. session on a firmer note but preoccupation with Thursday's Bundesbank council meeting kept it confined to ranges.

Most currency traders believe a cut in official rates is likely sometime in the next several weeks. Yet they are divided over whether it will occur on Thursday.

The dollar finished in the U.S. at 1.4830/35 marks, up from 1.4787/92 marks at the open.

The dollar climbed to 96.61/66 yen from 96.20/25 yen.

Traders said the dollar could suffer a mild setback if the Bundesbank refrains from cutting rates.

"The impact will be limited because even if they don't cut tomorrow people think they will be cutting in a fortnight," said Marc Chandler, currency analyst at Deutsche Bank.

Earlier, the Bundesbank trimmed its repurchase rate by six basis points to 4.39 percent.

Yet the dollar failed to benefit from that move.

"It was 'buy the rumor, sell the fact,'" said Dorit Ronnen, foreign exchange dealer at Bank Leumi Trust Co.

A contraction in German M3 money supply in July and comments from Bundesbank President Hans Tietmeyer on Tuesday have heightened the speculation about an official rate cut.

Most analysts said that even if the Bundesbank declines to lower rate on Thursday, it will only be a matter of time before they come down.

"Right now, it seems as if the mode of operation is to gradually lower the repo rate," said David DeRosa, director of foreign exchange at Swiss Bank Corp. "If they keep doing five or six basis points on the repo rate, sooner or later they will have to lower the other rates."

In addition to the Bundesbank meeting on Thursday, the market is looking forward to the U.S. Commerce Department's release of data on July durable goods orders.

U.S. economists in a Reuter poll, on average, expect durables orders to climb by 0.8 percent after a 0.3 percent drop in June.

The dollar stood at 1.2265/75 Swiss francs, down from 1.2230/40 Swiss at the open, and at Canadian $1.3580/85, up from C$1.3575/80.

Sterling closed at $1.5415/25, up from $1.5390/95 at the open, while the Australian dollar stood at $0.7404/09.-Reuter