Goldcorp acts on its principles: Gold is money


South Korea Says It Will Diversify
Reserves Without Dumping Dollars

From Reuters
Tuesday, February 23, 2005

TOKYO -- The dollar rebounded against the euro and the yen on
Wednesday after South Korea signaled that plans to diversify its
foreign exchange reserves were not new and did not mean it would
sell the U.S. currency. The dollar posted its biggest daily fall in
two months against major currencies on Tuesday as the market seized
on reports that South Korea's central bank planned to spread its
reserves, the world's fourth largest, among a greater variety of

Dealers said that the dollar's buy-back against the yen was also
sparked by data that showed a big slowdown in Japanese exports in
January, suggesting Japan's economy was struggling to recovery after
falling into recession for much of 2004.

"Given the magnitude of the dollar's fall yesterday, there's a
potential for a rebound as South Korea makes it clear that it has no
intention to dump dollars," said Hideaki Furumaya, forex manager at
Trust and Custody Services Bank in Tokyo. "But people are still keen
to sell into any dollar rally and this issue of reserve
diversification is not about to go away any time soon."

Following South Korea's original remarks on Monday, the dollar
tumbled to multi-week lows against most major currencies, seven-year
lows versus the Korean won and 22-year lows against the New Zealand

The U.S. dollar index, which measures its strength against a basket
of major currencies including the euro and the yen, fell 1.4 percent
on Tuesday in its biggest tumble since late December.

The dollar bought 104.45 yen as of 8:07 p.m. EST, up around 0.4
percent on the day and recovering from a 1.5 percent fall on

The euro traded at around 138.40 yen, also up around 0.4 percent on
the day. It fetched $1.3250 compared with $1.3259 in late U.S.

The yen's fall came after data that showed Japan's trade surplus in
January fell 59.9 percent from the same month a year earlier to
200.8 billion yen, below a median market forecast of 507.9 billion

Later on Wednesday, markets will focus on U.S. consumer prices in
January, as well as the release of minutes of the Federal Reserve's
rate setting meeting on Feb. 1-2.

* * *

Japan Denies Switch of Dollars to Euros

From Reuters
Wednesday, February 23, 2005

TOKYO -- Japan reiterated on Wednesday that it has no plan to divert
its massive foreign currency reserves out of dollars and into euros.

"We have no plan to change the composition of currency holdings in
the foreign reserves and we are not thinking about expanding our
euro holdings," Masatsugu Asakawa, director of the foreign exchange
market division at the Ministry of Finance (MOF), told Reuters.

The dollar fell to multi-week lows against most other major
currencies after South Korea's central bank said on Monday it would
diversify its foreign exchange reserves, Asia's fourth-largest, away
from government bonds into high yielding paper and a greater variety
of currencies.

But the dollar rebounded against the euro and the yen on Wednesday
after South Korea signalled that plans to diversify its foreign
exchange reserves were not new and did not mean it would sell the
U.S. currency.

Japan does not give a breakdown of the currencies in its foreign
reserves, which were the world's largest at $840.966 billion at the
end of January.

But given Japan's massive currency market intervention in the past,
in which it sold yen for dollars, the reserves are believed to be
predominantly in dollars.

The ministry has repeatedly said it will not diversify the reserves
out of dollars into other currencies, such as euros, since such
action could precipitate a further fall in the dollar.

Finance Minister Sadakazu Tanigaki told Reuters in an interview
earlier this month that Japan will be careful how it manages its
foreign exchange reserves due to the potential impact on financial

Tanigaki said the basic principle is that the reserves should be
stable and liquid.


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