WEAK ECONOMIC GROWTH, BUSH SPEECH ZAP DOLLAR

WEAK ECONOMIC GROWTH, BUSH SPEECH ZAP DOLLAR

The U.S. dollar traded lower early Wednesday afternoon, after declining on weak fourth-quarter U.S. economic growth and on the market's disappointment over President Bush's State of the Union speech Tuesday evening.

The dollar pushed upward at midday, although it remained broadly lower

from late Tuesday levels. One dealer said a large buy order went through the market, but another dealer said that order was stirred by a remark by Federal Reserve Chairman Alan Greenspan suggesting no further easing of monetary policy is likely soon.Earlier, the dollar had been moving sideways through the morning because the market didn't know where to go.

"Beyond some spasmodic moves, the dollar was dead in the water, just trading narrowly in a very jittery market," said Gerry Egan, dealer at Bank of Boston.

"The president's speech said nothing new. It was all political posturing with no meat on the bones," Mr. Egan said.

"As for the GDP (gross domestic product, which rose 0.3 percent), it tells us it's bad now and may be bad in the future," Mr. Egan said.

He said the remarks of Fed Chairman Alan Greenspan were old news and somewhat conflicting.

For example, Mr. Greenspan said past easing should lift the economy in the coming months - suggesting no more interest rate cuts - while in the next breath Mr. Greenspan said he's "not sure" Fed easing will be enough.

The British pound was looking fairly strong early Wednesday afternoon against the deutsche mark and the yen as well as the dollar. Analysts couldn't offer any explanation beyond noting the pound broke through several resistance levels on charts kept by technical traders.