If it falls again the tentative recoveries in Germany and Japan will be set back

If it falls again, the tentative recoveries in Germany and Japan will be set back. Japanese and German exporters are no longer in the extreme pain they were but US exporters have not yet started complaining about the dollar's rise.The problem is going to be sustaining this pattern. The ''orderly reversal" of the US currency's nosedive against the other two that G7 ministers called for in April 1995 has been accomplished. It can only be presumed that the DoT thinks the outcome potentially too embarrassing to risk.Keeping the dollar high will be toughThe dollar has finally cut loose from its lengthy association with the adjective "weak". It climbed above the symbolic 110 level yesterday, consigning last year's lows around 80 to the dustbin of history.The three main currencies, dollar, yen and German mark, are now round about where their governments want them. It would seem that the DoT is prepared to offer almost anything to get this monstrous new monopoly up and running.

We exaggerate the position, of course, but there is something mighty suspect going on here. Normally even the tiniest airline deals are referred by the DoT to the Civil Aviation Authority for analysis Not, apparently, in this case. The US won't grant anti-trust immunity for the deal unless the Brits allow open access to British airports for American carriers. So get on to it, British Airways orders the Department of Transport. Suddenly, the objections traditionally held by the DoT to an open skies policy with the US melt away, there's a flurry of activity and Sir Colin Marshall's poodles in government are jetting over to Washington to hammer out an accord.So desperate is the DoT to do BA's bidding that it is now prepared to consider setting up an "Offair" to protect the interests of other airlines on the transatlantic routes, an initiative always resisted in the past. The Department of Transport continues to trumpet the interests of British Airways as if Virgin, British Midlands and others never existed.This is nowhere more apparent than in negotiations now taking place to allow British Airways to set up a code sharing arrangement with American Airlines.

All the same, at a time when ministers and British Airways alike pay lip service to the idea of free competition and open skies, you would have thought it might have occurred to them that these days they might not always be batting on the same side But no. Privatisation and the onset of a limited amount of competition in the skies has failed to shake the airline in its belief that its own interests and those of the British people are one and the same thing.To some extent this is an understandable thing, for in the airline business the term "national flag carrier" continues to mean something; landing rights are still jealously guarded national properties, carved up on a bilateral basis between national airlines. A rough back of the envelope calculation reveals that as a result, the market would have to rise by more than 70 per cent over five years to beat a conventional tracker, or fall by more than 25 per cent.Both these things are possible, but if history is anything to go by they are highly unlikely Needless to say, the prospectus doesn't mention this. But then if you pointed these things out, you might never sell a PEP.Government is still at BA's biddingIt's an odd thing about British Airways, but it has always regarded the Government as a 100 per cent owned subsidiary at its beck and call. This is because the HSBC PEP Plus offers you only the capital growth on the Footsie plus 33 per cent, not the total return including dividends.

The main risk of embarrassment to the President lies in the possibility that today's turn-out will fall below the 60 per cent Mr Yeltsin's strategists and independent analysts believe is essential to his re-election.They say Mr Zyuganov will benefit from the support of a hard core of disciplined loyalists but will find it difficult to expand his vote beyond this base, making a low turn-out the key. They jumped 7.5 per cent in May, following a 5.9 per cent increase in April.In addition, the index of leading indicators rose 0.3 per cent in May. This was the fourth increase running in the index, which is meant to signal the strength of activity during the next six months.However, Fed officials have been signalling that it is too early to be alarmed about the resurgence in growth, as inflation remains firmly under control. Even though most analysts do not think the Fed's open market committee will raise US interest rates after the meeting ends today, the strength of the economy means the next move is likely to be an increase. Further evidence of the buoyancy of the American economy was provided yesterday by a surge in new house sales to the highest level since April 1986. The state was also home to Timothy McVeigh, one of the two men charged with carrying out the Oklahoma bombing He is due to go on trial later this year.. The dollar hit its highest level against the yen for two-and-a-half years yesterday, passing the psychological barrier of 110 as the Federal Reserve began a two-day policy meeting. As they picked up the suspects at their homes, police found 400lb of the chemical as well as some 200 guns.