LONDON, 23 September 2004 — The dollar traded higher against the euro here yesterday but investors remained concerned by Fed comments suggesting a pause in the upward movement of US interest rates. The single European currency in late-day trade was at 1.2253 dollars, down from 1.2330 late Tuesday in New York. The dollar was at 110.52 yen after 109.73 on Tuesday. Overall, the greenback continued to recover from its heavy overnight falls in the wake of Tuesday’s rate-setting meeting of the US Federal Reserve.

The euro was changing hands at 1.2253 dollars against 1.2330 late on Tuesday in New York, 135.44 yen (135.26), 0.6826 pounds (0.6860) and 1.5438 Swiss francs (1.5462). The dollar stood at 110.52 yen (109.73) and 1.2612 Swiss francs (1.2537). The pound was at 1.7944 dollars (1.7966), 198.26 yen (197.02) and 2.2638 Swiss francs (2.2527).

Stocks in the United States fell sharply yesterday after oil prices jumped more than a dollar and a US government review questioned home finance company Fannie Mae’s accounting methods. Blue chips fell to the lowest level in three weeks.

The Dow Jones industrial average was down 111.42 points, or 1.09 percent, at 10,133.51. The Standard & Poor’s 500 Index was down 12.77 points, or 1.13 percent, at 1,116.53. The technology-laced NASDAQ Composite Index was down 27.67 points, or 1.44 percent, at 1,893.51.

For every stock advancing on the NASDAQ and the New York Stock Exchange, about three stocks fell. Volume on the Big Board at midday was moderate as 661 million shares changed hands. NASDAQ trading totaled 814 million shares.

Asian share markets closed narrowly mixed yesterday with profit taking continuing in a number of markets that have seen recent rallies, notably China and Indonesia. Japanese share prices closed down 0.55 percent after the announcement of a lower than expected trade surplus in August raised concerns over the sustainability of the country’s export-led recovery, dealers said. The Tokyo Stock Exchange’s benchmark Nikkei-225 index lost 61.46 points to 11,019.41.

South Korean share prices closed sharply lower, ending down 2.6 percent, as institutional investors dumped Samsung Electronics and other blue chips, dealers said. The KOSPI index closed down 22.05 points at 835.10, off a high of 863.19. It was the first time since September 10 that the key index fell below 840 points. Hong Kong share prices closed 0.24 percent lower, with sentiment hit as local banks raised interest rates in line with the US Federal Reserve action overnight, dealers said. The benchmark Hang Seng Index closed down 32.25 points to 13,272.23, off a low of 13,265.17 and high of 13,356.88, on turnover of 17.5 billion Hong Kong dollars ($2.24 billion).