LONDON (AFX) - The yen rose against the dollar in sluggish early trading, extending recent gains as participants await today's confirmation hearing of U.S. Treasury Secretary nominee Paul O'Neill.
Ongoing speculation that O'Neill may alter the long-standing strong dollar policy has weighed the U.S. currency. Analysts said any hint of a shift away will further pressure dollar/yen.
Analysts expressed doubt, however, that O'Neill will point towards a softer dollar. "It's inconceivable that he will adandon the strong dollar policy at these hearings," said Chris Furness, strategist at 4CAST.
The market also eyed today's key U.S. December consumer prices. CPI is expected to be tame, up 0.1 pct overall and 0.2 pct, excluding food and energy, according to Conrad DeQuadros, economist at Bear Stearns in New York.
Meanwhile, today's OPEC meeting in Vienna garnered attention. Analysts expect OPEC officials to announce oil production cuts between 1.5 million to 2.0 million barrels.
In the UK, sterling remained vulnerable ahead of November average earnings and December unemployment data. Dealers said buying of euro versus sterling by a large Spanish bank continued to pressure sterling.
Analysts pooled by AFX News forecast November average earnings to have risen 4.2 pct year-on-year and the jobless total is expected to have fallen a seasonally-adjusted 5,000 on a claimant-count basis from November.
The euro was steady, huddled around the 0.94 usd area.
Other economic news scheduled Wednesday are the U.S. Federal Reserve's Beige Book and December industrial production data.