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Dollar puts on late spurt

vs mark in Europe

LONDON: The dollar put on a late spurt against the mark in Europe as traders squared their books in a thin market already cool on the German currency, dealers said.

Ever louder talk of a Bundesbank repo rate easing this week combined with the ongoing predilection for high-yielding currencies to boost the US unit at the mark's expense. "Profit-taking in the mark/yen cross gave a leg up to dollar/mark, helping it strengthen through 1.40.

By 1525 GMT the dollar was trading at 1.4079/84 marks, more than a pfennig above late Friday's European level of 1.3940/50.

The dollar/yen performance drew less applause. After a day spent range-trading, it was quoted at 91.25/33, unchanged from its 91.25/28 level late on Friday.

But traders said dollar/yen remained on an upward path. "The pattern is for the yen to weaken no one wants to hold yen," said a senior dealer at a US bank here.

The mark weakened to 64.82/85 yen from 65.41/44 on Friday.

The market eagerly awaited the US Treasury's quarterly refunding auction, which kicks off tomorrow.

The refinancing, which will offer a record total of $42.5 billion securities, will be scrutinised to see if Tokyo's new deregulatory package aimed at promoting overseas investment by Japanese institutions has the desired effect.

But today brought signs that Japanese investors have been pouring more funds into foreign bond markets recently.

Data released today showed they bought a monthly record of $20.20 billion worth of foreign bonds in June.

High-yielding currencies continued to claw gains from the sagging mark. The Italian lira struck at 1119.50 per mark before returning to trade at 1124.25/75 at 1600 GMT, versus late Friday's 1127.00/75. The peseta rose to 85.30/31 from 85.48/51. -Reuter