Euro, Yen lower

NEW YORK (AP) - The ailing euro continued its steady decline against most major currencies Monday, while the yen weakened against the dollar.

Currency traders said the yen's fall was a surprise, especially because of the expected release of positive economic indicators by the Bank of Japan on Monday evening.

''The Tankan survey is expected to show improvement in business sentiment and capital expenditure plans,'' said Robert Lynch currency strategist of BNP-Paribas.

But even with the good news that is expected to come out of the quarterly Tankan survey, currency traders said that the Japanese economic recovery is occurring at a slow rate.

In late New York trading on Monday, the dollar was quoted at 108.84 Japanese yen, up from 108.02 yen. One week ago, the dollar was quoted at 107.76 Japanese yen.

In other late New York trading, the euro was quoted at 87.90 cents, down from 88.26 cents late Friday.

Although the euro broke below the key technical level of 88 cents, it has managed to stay within the 87 to 89 cents range for about a week now.

''The trend is flat. This is likely to persist,'' Lynch said.

Although the euro experienced a slight rise against the dollar and other foreign currencies last Friday, currency traders said that downside pressure on the euro should re-emerge.

The release of anticipated strong monthly U.S. employment figures this Friday could act as the catalyst to drag the flagging euro down further, Lynch said.

The euro plunged to record lows, trading at 84.38 more than a week ago, in a free fall sparked earlier this month by comments from German Chancellor Gerhard Schroeders suggesting the currency woes were good for European exports. The euro also faltered after Danish voters rejected adoption of the currency in a referendum last Thursday.

The European currency was temporarily propped up Sept. 22 after the U.S. Federal Reserve joined the European Central Bank and the Bank of Japan to intervene in the currency market.

Currency traders are now awaiting the outcome of the ECB's bi-weekly meeting this Thursday.

''We could see another (interest) rate hike, but I don't think that is likely to occur,'' Lynch said. ''It certainly will not help the euro.''

The last rate movement was a one-half percentage point increase on May 16.

In late New York trading, the dollar also was quoted at 1.7347 Swiss francs, up from 1.7253, and 1.5080 Canadian dollars, up from 1.5029. The British pound fell to $1.4686 from $1.4743.

Currencies of the 11 countries participating in the euro are no longer traded separately and are tied to the euro by a fixed rate. Based on Monday's euro rate, the dollar was worth: 2.2271 German marks, up from 2.2156; 7.4693 French francs, up from 7.4308; and 2,204.82 Italian lire, up from 2,193.45.