LONDON (AFX) - The euro regained some ground against most major currencies in early trade, ahead of tomorrow's key U.S. indicator which will provide further clues about consumer confidence across the Atlantic, dealers said.
Simon Hayley, currency strategist at IDEAglobal said "the euro is going to be choppy range trading today".
In economic news, the German finance ministry announced earlier that German GDP was up a real 3.1 pct in 2000 compared with 1.6 pct growth a year earlier.
Growth was led by exports but the economy also profited from the worldwide economic upturn and the weak value of the euro, whilst domestic demand was strong, the continued decline of the construction industry contributed to the economic slowdown, it said.
Analysts put the euro's next support level at 93.41 usd and 94.86 usd for the next resistance. In the light of minimal economic news, participants anticipate a quiet trading session with the dollar expected to remain little changed from current levels, dealers said. However, Friday's important U.S. December retail sales release will gather a lot of attention.
Hayley said "we forecast a fall of 0.1 pct for the month, slightly below market consensus which is for a small rise. This in turn, should help euro/dollar back up slightly."
The analyst said that sterling/dollar continues trading against euro/dollar. "We found that there has been very little UK specific effects. For every one pct gain on euro/dollar, sterling gained half a pct against the dollar," he noted, adding that "sterling has been dragged up in the slipstream of euro/dollar. It is a very close corrolation and sterling gets buffeted by the bigger currency blocks euro and dollar."
All eyes are focused on today's Monetary Policy Committee reporting on its monetary policy decision at noon. Most analysts expect the MPC to leave base rates on hold at 6.0 pct for the 11th consecutive month.
Analysts said that after the meeting the market could expect a little sell-off on disappointement of a 'no change' in interest rates.
The dollar strengthened further against the yen in reaction to active selling by Japanese exporters and investors' hesitance to take fresh positions ahead of U.S. retail sales and PPI data later today, dealers said.