LONDON (Thomson Financial) - The euro was a touch higher in quiet trading as
UK and Japanese markets observed a public holiday and players look to this
week's interest rate decisions from the European Central Bank and the Bank of
England.
The ECB is widely predicted to keep its benchmark rate unchanged at 4
percent as it continues to battle inflation. The ECB has kept its rate unchanged
even as its U.S. counterpart has slashed its benchmark rates by a total 325
basis points since September.
Amid today's holiday thinned trading, the euro found some support, however.
"European traders, along with some rumoured Eastern European buying helped
push the euro to $1.55 and as we saw on Friday," said Peter Stoneham at IFR
Markets.
Micheal Klawitter at Dresdner Bank said in the absence of any key U.S. data
this week, the market focus will be on Thursday's ECB press conference.
"Following the weak Eurozone data, any down-toning in the ECB's hawkish
rhetoric would weigh on euro," Klawitter said.
In the United Kingdom, the Bank of England too is expected to hold fire
although there is small chance of a rate reduction -- and in turn some pressure
on the pound.
"With the UK enjoying a Bank holiday today and Japan closed for the Golden
Week, liquidity in the FX market should be lower than normal," Klawitter said.
London 1011 GMT Hong Kong 1 p.m. (0500 GMT)
U.S. dollar
yen 105.21 down from 105.24
Swiss franc 1.0534 down from 1.0540
Euro
U.S. dollar 1.5501 up from 1.5458
yen 162.73 up from 162.60
Swiss franc 1.6296 unchanged 1.6296
pound 0.7847 up from 0.7824
Pound
U.S. dollar 1.9706 down from 1.9753
yen 207.33 down from 207.81
Swiss franc 2.0760 down from 2.0823
sivakumar.sithraputhran@thomson.com
ss/kf1
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