DOLLAR FALLS AFTER SPIKE ON NEWS FROM RUSSIA

DOLLAR FALLS AFTER SPIKE ON NEWS FROM RUSSIA

* Noon Monday - The U.S. dollar was trading lower at midday Monday after giving back early gains on news that Russian President Boris Yeltsin sacked his entire government.

Mr. Yeltsin's reassurances that the course of economic reform was unchanged, and hopes that the new government might strengthen the hand of reformers, helped change sentiment.The dollar also was dragged down against the Deutsche mark by heavy selling of dollars for Swiss francs.

The dollar turned lower against the Japanese yen with dealers saying the market was spooked by talk of the Swiss National Bank selling dollars near 130.60 yen.

The dollar also lost ground vs. the yen in the wake of a story in the Nihon Keizai Shimbun's Tuesday morning edition that said Japan's ruling Liberal Democratic Party has decided to increase public works spending and implement small tax cuts to reduce the cost of raising children and encourage investing.

A spurt in oil prices following news that the Organization of Petroleum Exporting Countries and non-OPEC countries will jointly reduce their oil production sent U.S. stocks broadly lower amid rising inflationary concerns.

The dollar was trading at 130.23 yen, down from 130.44 late Friday, and at 1.8269 Deutsche marks, down from DM1.8320.

The British pound surged along with oil prices, rising to $1.6766 from $1.6678.

* 9 a.m. Monday - The dollar was mixed Monday morning, trading higher against the Japanese yen, but lower vs. the Deutsche mark.

The British pound got a boost from surging oil prices, which were seen as a negative for Japan.

The dollar surged initially on the Russian news, but later retreated as it was seen as reaffirming that Mr. Yeltsin is firmly in control despite his health problems and is preparing to run for a third term in office.

Indonesian Finance Minister Fuad Bawazier has canceled a decree, issued on Friday, which imposed a 5 percent tax on certain foreign exchange transactions.

* 3 p.m. Friday - The dollar declined on profit-taking Friday afternoon, but remained above 130 yen despite talk of intervention by the Bank of Japan to support the yen.

The yen, already at two-month lows against the dollar, could weaken further if Japan does not take action to deregulate its economy and spur consumer demand, American Automobile Manufacturers Association President Andrew Card said.