| |
| |
![]() |
| |
|
| |
|
| |
|
LONDON : The euro was steady against the dollar on Tuesday as traders geared up for an interest-rate decision from the European Central Bank and key US data later in the week.
The single European currency stood at 1.3610 dollars in late European trade, from 1.3613 dollars in London late on Monday.
The dollar dipped to 116.27 yen, from 115.83 yen late on Tuesday.
The dollar was steady after a key US manufacturing survey was broadly in line with expectations, suggesting that the US sub-prime crisis has not yet hit the wider economy.
The ISM manufacturing index fell to 52.9 in August from 53.8 in July. While it was just below analyst forecasts for a reading of 53.0, many investors had been bracing themselves for a very weak reading following a month of turmoil in financial markets.
"The modest decline in the ISM manufacturing index suggests that the turmoil in financial markets is so far having only a limited impact on the real economy," said Paul Ashworth at Capital Economics.
"It suggests that recent talks of an imminent recession are, at best, premature," he added.
Meanwhile the euro and pound both steadied after falling earlier in the day.
Focus in the currency markets is now likely to turn to the series of upcoming interest rate decisions. Central banks in the 13-nation eurozone, Britain, Canada, and Australia are all due to set monetary policy over the next two days.
None of the four banks are predicted to hike rates, and much attention will be given to accompanying comments from the European Central Bank, which is now expected to keep its key refi rate on hold at 4.00 percent on Thursday in light of the tensions in the financial markets.
With no change expected, the market will pay close attention to the subsequent press conference from ECB President Jean-Claude Trichet.
"One unfortunate slip of the tongue and Trichet could provoke a massive volatility backlash," said Bear Stearns economist David Brown.
Global markets have been shaken in recent weeks over problems with "sub-prime" or high-risk US homeowners defaulting on loans, sending banks and funds with such mortgage-backed securities scrambling to cover their losses.
The direction of central banks' monetary policy could influence the US Federal Reserve to lower its own benchmark rate to help out distressed markets, dealers said.
Investors will also be looking at a batch of US economic indicators this week including employment reports, home data and the Fed's "Beige Book" report on economic conditions.
But the data is expected to have limited impact as it is backward-looking, covering periods before the sub-prime mortgage woes erupted.
The euro was changing hands at 1.3610 dollars, against 1.3613 dollars late on Monday, 158.24 yen (157.65), 0.6766 pounds (0.6747) and 1.6475 Swiss francs (1.6463).
The dollar stood at 116.27 yen (115.83) and 1.2105 Swiss francs (1.2097).
The pound was being traded at 2.0107 dollars (2.0174).
On the London Bullion Market, the price of gold climbed to 678.75 dollars per ounce, from 672 dollars late on Monday.
- AFP /ls
|
