Dollar Falls More Vs Euro,Up Vs Yen On Intervention Fears By Riva Froymovich Of DOW JONES NEWSWIRES NEW YORK (Dow Jones)--The dollar fell further Thursday against the euro, which over the last several trading sessions has gained back all of its losses since late September against the U.S. currency. The fallout from the last Federal Open Market Committee meeting has been a sharp sell-off of the dollar. Thin market conditions have exacerbated the situation. Fewer players are in the market due to the year-end and after several months in which investors unwound long-held bets in riskier trades to protect against global uncertainty. Many of those risk averse traders also fled during that period to the dollar, usually considered a safe haven asset, and are now scrambling to get out. "Exceptionally thin conditions have allowed the dollar's fall to continue unopposed and there seems little to turn this trend before year-end," said Chris Turner, head of foreign exchange strategy at ING in London. He said it would not be surprising if part of the move is attributable to central banks diversifying from dollars into gold. Meanwhile, the dollar is higher versus the yen after several consecutive sessions of declines. But traders turned cautious Thursday on some verbal jawboning from Japan's Ministry of Finance, which markets took as a warning of possible currency market intervention. The Japanese finance ministry's top bureaucrat, Naoyuki Shinohara, vice finance minister for international affairs, said the ministry is keeping a close eye on the currency market and will take appropriate steps when they become necessary. He would not comment on specific levels. Separately, the Bank of Japan began a two-day rate policy meeting Thursday and will announce a decision on Friday. "Following the aggressive Fed policy measures announced on Tuesday, expectations are high for the BoJ," said Brown Brothers Harriman analysts. In U.S. data, traders are awaiting the releases of the December Philadelphia Fed manufacturing index and the November Conference Board Leading Economic Indicators index at 10 a.m. EST. Early Thursday in New York, the euro was at $1.4622 from $1.4412 late Wednesday, while the dollar was at Y88.38 from Y87.40. The euro was at Y129.22 from Y125.78. The U.K. pound was at $1.5387 from $1.5508, and the dollar was at CHF1.0515 from CHF1.0747 late Wednesday. Overnight, the euro rose as high as $1.4720, its highest level in 12 weeks. The dollar fell as low as Y87.18 - just shy of the fresh 13-year low struck Wednesday of Y87.13 - but then advanced to an intraday high of Y89.33. A trader in Japan said the MOF was not seen in the market. The euro also continues to appreciate strongly against the pound. It reached an all-time high of GBP0.9552 Thursday. Some analysts suggest parity might be reached before the end of the year. Elsewhere, Russia's central bank allowed the ruble to weaken for the third time this week Thursday, as downward pressure on the currency continued following a slump in oil prices, the country's chief export. The central bank engineers the weakening by widening the ruble's trading band against a basket of 55% of dollars and 45% of euros in each direction. The ruble has shed more than 8% of its value since early November and nearly 13% from its strongest level in early August. "With the recent abrupt strengthening of the euro, the central bank could afford even a 90-kopek move in the ruble against the basket, allowing it to keep the dollar/ruble rate - which households see as the financial stability indicator - almost unchanged at RUB28.05," said analysts at VTB Capital in a note. Canada Morning The Canadian dollar is moderately higher but off fresh 5-week highs made earlier Thursday, continuing its gradual upward drift in line with generalized global dollar weakness. The Canadian currency has shown little direct impact from weak Canadian October retail sales data released earlier. The U.S. dollar was at C$1.1936 early Thursday, from C$1.1996 late Wednesday. -By Riva Froymovich, Dow Jones Newswires; 201 938-5063; riva.froymovich@dowjones.com (Lidia Kelly in Moscow and Paul Evans in Toronto contributed to this report.)

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