LONDON (AFX) - The euro was marginally higher in quiet midday trade, dealers said. They said the market was thin making it very easy to move prices one trade to the next and said trading would be light ahead of US Federal Reserve Chairman Alan Greenspan's speech on monetary policy in Congress tomorrow.
"It has not been a busy market and there is not a great deal to talk about and no big volumes," Adrian Schmidt, a currency strategist at Royal Bank of Scotland said.
A currency trader said that the upward tick was a "corrective move".
"We are trading in the mid 0.84 to mid 0.86 range and are smack in the middle of that. The euro is just tracking what is happening in the dollar," the trader said.
Sterling was slightly higher in a technical correction following this morning's decline, dealers said.
"The Royal Bank of Scotland deal initially pushed sterling lower but it's come back now," Schmidt at Royal Bank of Scotland said. This morning, Royal Bank of Scotland Group PLC confirmed that its Citizens Financial Group Inc unit is to buy Mellon Financial Corp's retail, small business and certain middle market commercial banking businesses for 2.1 bln usd in cash.
"RPI was slightly higher than expected but this was due to seasonal food and didn't affect trade," Schmidt said.
"We are in typical summer trade. We get a bit of action and then drift back to where we were," he added.
Jeremy Hawkins, chief economist Europe at Bank of America said that the market would keep their eyes on today's second round of voting for the leadership of the Conservative Party.
"If Kenneth Clarke gets through then all three parties could end up having a leader which is for joining the euro," he said. The UK retail price index rose 0.1 pct in June for a 1.9 pct year-on-year increase.