Reply #36: FOREX-Profit-taking, China comments pushes the dollar lower

[54anickel]

http://today.reuters.co.uk/investing/financeArticle.aspx?type=usDollarRpt&storyID=URI:urn:newsml:reuters.com:20051212:MTFH97467_2005-12-12_09-58-02_L12423614:1

LONDON, Dec 12 (Reuters) - The dollar lost more half a percent against the euro in early European trade on Monday as investors trimmed holdings of greenback ahead of a Federal Reserve key monetary policy meeting this week.

Comments from an adviser to the Chinese central bank that Beijing is dangerously exposed to the dollar and needs to work with other East Asian economies to slow rate of accumulation also dragged the greenback lower.

Yu Yongding told Market News International that China must reduce accumulating dollar and cut its holdings.

The dollar fell on those comments and triggered automatic stop loss orders around $1.1840, traders said.

"There is some dollar softening this morning as some people are getting jittery ahead of the Fed meeting. It's all positioning as some investors feel the Fed may change its language," said Brussels-based Peter Fontaine, currency strategist at KBC.

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