LONDON (AFX) - Major currencies returned to range bound trading mid-session on a lack of compelling leads, dealers said. After a resurgence that started in Asian trading, the yen remained well bid although slightly weaker than earlier with the continued unwinding of short positions.
"Japanese investors have had to rethink their position of hedging foreign investments," Standard Chartered economist, Razia Khan said. Japanese officials also boosted the yen by voicing their concerns over the yen's rapid decline in recent months, she added.
Furthermore, talk that pro-reformist Junichiro Koizumi could well become Japan's next prime minister, boosted the yen.
Meanwhile, stronger-than-expected first-quarter results from Intel Corp and Texas Instruments Inc after close of trade in New York kept the dollar from falling too far.
Focus has shifted from economic news to corporate performance as the earnings season starts, dealers said.
Given this backdrop, today's U.S. Feb trade data should not unduly alarm the market even if it does confirm that the U.S. current account deficit this year is well on track for a record high, they added.
The story was different for the euro which continued to struggle just below 0.8800 usd.
Disappointment over the European Central Bank's decision to hold rates last week, "is still very much a feature," pressuring the euro, Khan added.
Driving the point home, IMF managing director Horst Koehler repeated his call for a euro zone rate cut, saying that such a move will be a boost both to the euro zone and the world economies at a critical period.
Sterling was softer after the Bank of England's minutes showed a 6:3 split in favour of a rate cut at the April meeting.
The minutes revealed that further cuts may be at hand, pressuring sterling slightly, Khan at Standard Chartered said.