Currencies track the war news (page 2 of 2)

However, the greenback lost most of its gains after an emergency meeting between Finance Minister Masajuro Shiokawa and Bank of Japan Governor Toshihiko Fukui ended without any major changes in policy that could have weakened the yen.

The BOJ, holding its first policy setting gathering under its new Governor, decided to leave monetary policy unchanged but to provide as much liquidity to the market as needed for the time being. The dollar's downside was also indirectly supported by investors building long positions in cross yen trade, including the Australian and Canadian dollars.

Meanwhile, Japan's top financial diplomat Zembei Mizoguchi, repeated his warning that the Finance Ministry was ready to act to prevent large swings in foreign exchange rates.

The dollar was trading 120.00 against the yen on the last trading day, after sources said Japanese monetary authorities had conducted dollar-buying intervention during London and New York trading hours in the past few days, continuing this year's pattern of covert intervention.

In the coming week, the quarterly survey of business sentiment by the BOJ will be closely watched for any impact of the recent stock market rout and uncertainty stemming from war in Iraq.

Range for the week: 118.00 -123.00.

Sterling

Sterling advanced against the limp dollar and eased versus the euro as markets took heart from rising public support for the British Prime Minister Tony Blair while fretting over war.

The public outcry seemed to dwindle after the war began, decreasing pressure on Tony Blair and fanning markets' hopes for lessened political uncertainty with Blair facing a smaller chance of being ousted. Sterling pushed to a one week high of $1.5795 after reports of fierce resistance from Iraqi troops weighed heavily on the dollar.

However, the pound soon slipped against the euro and dollar on the last trading day as concerns grew over the length and cost of war. UK Chancellor of Exchequer Gordon Brown raised the war budget to 3 billion pounds from 1.75 billion.

Meanwhile, comments from BOE Monetary Policy Committee member Marian Bell who told Reuters in an interview the bank could still cut interest rates again, temporarily shifted focus away from the U.S. and British led war and pressured the pound.

Range for the week: $ 1.5600 - $ 1.6100.