Sun, May 23, 2004 - Page 10 News List

Euro gains against dollar on oil fears


The euro rose against the dollar on Friday amid continued concerns about the effects of the high oil price on growth as OPEC ministers prepared for a key informal meeting in Amsterdam.

The euro was being quoted at US$1.2009 from US$1.2066 early in the afternoon and US$1.1969 late on Thursday.

The dollar was at ¥112.08 from ¥111.99 earlier and ¥112,75 in New York late on Thursday.

The euro, which had fallen to US$1.1895 late on Thursday, rallied to US$1.2072 in early afternoon trading and then eased in late trading in Europe.

At BNP Paribas bank, economist Iain Stannard commented: "Investors have all their attention on Amsterdam to see which signals members of the Organization of Petroleum Exporting Countries are going to send."

The dollar, which had slipped against all currencies in early trading, rallied later after Saudi Arabia, the main OPEC producer, had said in Amsterdam that it would propose that OPEC increase its production quotas by more than 2.0 million barrels per day.

In this context, traders will watch closely a meeting of finance ministers from the G7 industrialized countries and Russia in New York this weekend.

Sterling rose strongly after the Bank of England had published data showing that UK consumers were hungry for credit in April.

"The scenario for a rate increase in June was strengthened by these figures," said Marc Chandler, an economist at HSBC.

The euro was being quoted at US$1.2009 from US$1.1969 late on Thursday, at ¥134.60 from ¥134.55, £0.6712 from £0.6729 and 1.5371 Swiss francs from SF1.5371.

The dollar was at ¥112.80 from ¥112.75 and SF1.2789 from SF1.2852.

Sterling was at US$1.7890 from US$1.7774, ¥200.63 from ¥200.37 and SF2.2887 from SF2.2843 late on Thursday.

The price of gold was US$385.30 an ounce at the fixing here from US$339.50 on Thursday.

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