Sun, Jul 11, 2004 - Page 10 News List

Dollar regaining ground against euro; yen gains

AFP , LONDON

The dollar clawed back some of its weekly losses against the euro on Friday as investors took profits in Europe's single currency ahead of the weekend.

The euro stood at US$1.2388 against US$1.2387 late on Thursday in New York, having risen as high as US$1.2424 during Asian deals, its best level since March 18.

The dollar slipped to ¥108.21 from ¥108.92 on Thursday.

However, its recovery from three and a half month lows was lackluster and further pressure on the US currency is likely again next week in the run-up to key US inflation data, analysts said.

"Markets are back to watching the US data, and weakness evident in the June employment data continues to spill over over into other indicators," said Herve Goulletquer, analyst at Calyon.

"Fixed income [eg bond] markets will benefit while the dollar could see some renewed downward pressure," he added.

The dollar has been hit hard in the wake of last Friday's US jobs report for June, which diminished expectations of rapid interest rate rises from the US Federal Reserve in the months to come.

Elsewhere, solid results from US bellwether General Electric Co were a relief to the market following a raft of disappointing US corporate results.

Despite the encouraging earnings that helped push Wall Street higher, the euro remained above US$1.2370 for most of the day, following its move above 1.24 late Thursday.

Meanwhile, wholesale inventories data, which showed an increase of 1.2 percent in May, failed to impact the market.

IDEAglobal currency analyst Divyang Shah said investors tended to wait on the sidelines ahead of the weekend, wary of the weekend's Japanese elections for the upper house.

"With this being a Friday the temptation is to book profits with a view to making another attempt next week," he said.

Sterling continued to perform well, trading consistently above US$1.85 for the first time since early April, with British trade data early in the day having little effect.

The euro was changing hands at US$1.2388 from US$1.2387 late on Thursday in New York, ¥134.05 (¥134.96), £0.6676 (£0.6693) and 1.5185 Swiss francs (Sf1.5175).

The dollar stood at ¥108.21 (¥108.92) and 1.2257 Swiss francs (Sf1.2247).

The pound was at US$1.8555 (US$1.8502), ¥200.82 (¥201.61) and 2.2746 Swiss francs (Sf2.2663).

On the London Bullion Market, the price of an ounce of gold stood at US$406.50 from US$405.35 late on Thursday.

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