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The dollar is largely ahead in today's market, carrying over yesterday's trends.

Once again, the "theme this morning is euro/yen," said Margaret Kudarauskas, senior currency analyst at


, a company that tracks the foreign exchange markets. "The yen strength continues, and analysts seem to be saying it's repatriation."

Repatriation has been the word of the month for yen trading. As the Japanese fiscal year-end approaches on March 31, Japanese corporations are converting their holdings back into yen for accounting purposes. February repatriation is much more significant, said Kudarauskas, as firms must get their holdings in order before the final days.

The yen has pushed the euro down to six-week lows. The European single currency was lately trading at 105.63 yen, down from yesterday's close of 106.89.

Down trading in euro/yen has pulled the dollar down against the yen also today. The yen has risen on the dollar every day since the "symbolic" rate cut in Japan last week. The dollar was most recently trading for 116.14 yen, down from a close of 116.48 yen yesterday.

Despite the dollar's downturn vs. the yen, it is making strong headway against other major currencies today, led by a strong drop in euro/dollar trading. The main driver, according to Kudarauskas, is a reversal of sentiment about the U.S. economy in recent days. Since

Fed Chairman

Alan Greenspan's testimony to


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earlier this week, forex traders are experiencing a sense of receding pessimism, and turning "dare I say, optimistic," Kudarauskas said.

In response to the

European Central Bank's

decision to leave interest rates unchanged today, as expected, Kudarauskas noted that "analysts agree that one of the things hurting the euro is that

the euro zone community can't lower interest rates." The U.S. has lowered rates twice since the new year, 50 basis points each time. Japan lowered rates symbolically last week. "If

the euro zone is too slow to ease, it will take longer to turn around," she said, adding what we might see is the "U.S. starting to rebound, and a stall in the European rebound."

The euro was trading near eight-week lows against the dollar earlier and was recently trading at $0.9092, down from $0.9181 at yesterday's close.

Kudarauskas believes that the U.S. economic slowdown was in large part a psychological matter, and that at the first sign of a slowdown, "the population at large will get spooked and stop spending." She blames this for the large rise of the euro against the dollar in the last several months.

The dollar is also making gains on the British pound today. The pound was recently trading at $1.4478, down from yesterday's close of $1.4558.

Both the Australian dollar and the Canadian dollar are also losing value against the U.S. currency today. The Aussie buck was most recently at $0.5243, down nearly a half cent from $0.5292 at the close of the market Wednesday. The U.S. dollar was recently trading up marginally on the Canadian dollar, at C$1.5281 from yesterday's close of C$1.5278.

The Polish zloty hit record highs against the slipping euro for the second consecutive day today, having been rising steadily since October. The zloty was recently trading for 0.266 euros per zloty, and for $0.245 against the U.S. dollar.

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