LONDON (AFX) - The euro was lower in early trade ahead of the release of euro zone M3 money supply figures today or tomorrow, dealers said.
Dealers said trade in the single currency would remain directionless until the M3 data and various U.S. figures, including Friday's closely-watched non-farm payroll numbers, came out. They noted that the euro had reversed yesterday's gains following European Central Bank president Wim Duisenberg's address to the European Parliament's economic and monetary affairs committee. "His comments could be seen as justifying the ECB's unexpected rate cut on May 10 and the lack of intervention to support the currency," Halifax economist Nick Mirtchev said.
Dealers noted that Duisenberg seemed less concerned about the inflationary pressure posed by the weakness of the euro than Bundesbank president and ECB board member Ernst Welteke had appeared in a German newspaper on Friday.
Dealers said talk of ECB intervention had died down as the euro seemed to have stabilised above 0.8500 usd.
In the UK, which was closed yesterday for a public holiday, dealers were mulling over Duisenberg's surprise comment that the UK government would be able to set the exchange rate at which sterling entered the euro.
In another development yesterday, an ECB aide cast doubt on UK chancellor of the exchequer Gordon Brown's assertion last week that euro zone member countries were coming round to the view that the central bank's fiscal and monetary rules should be rewritten along Bank of England lines.