LONDON (AFX) - The Euro was slightly weaker in early London trade from afternoon Tokyo levels as the market consolidated after yesterday's strong move and with many investors not prepared to take major positions ahead of US retail sales data this afternoon, dealers said.
"At the moment the euro is getting a bit tired after trying to get through the 0.90 level," Jeremy Hawkins, chief economist Europe at Bank of America said.
"It will probably hang around these levels until the US retail sales is released," he added.
The yen was slightly stronger as investors shrugged off the monetary easing by the Bank of Japan, dealers said, adding the the stronger Nikkei was also supporting the currency.
"People look at what the BoJ has done and wonder if it will have much impact. It is like pushing a piece of string," Hawkins said. The BoJ undertook further quantitative easing, by raising the daily current account balances target to 6 trln yen from 5 trln and increasing planned purchases of government bonds from 400 trln yen per month to 600 trln per month.
"The move is a step in the right direction, but is unlikely to have major effect on additional lending in the real economy," Michael Klawitter, a currency strategist at West LB said.
Sterling was largely unchanged against the euro and slightly weaker against the dollar ahead of consumer price data due later this morning.
"Sterling is sidelined at the moment. If the retail price data is weak then it will increase the pressure on the Bank of England to ease," Hawkins at Bank of America said.
Klawitter at West LB said: "Sterling sentiment is suffering from doubts whether the UK service sector can stem the downturn. Given the risk that today's RPIX year-on-year rate may be worse than expected, some pressure on sterling, in particular against the euro, will persist."