17 August 2001, 12:39 Forex - Euro down vs dollar in early London trade ahead euro zone CPI for July
LONDON (AFX) - The euro was down against the dollar in early London
trade ahead of the euro zone July consumer price index, due at 11.00 am
today, dealers said.
Whether or not the common currency can get more optimism on the
euro zone's Harmonised CPI for July is very debatable, they added.
Jane Foley, currency strategist at Barclays Capital, said: "The
market is expected today's Harmonised CPI to come in a lot weaker than
forecast of 2.8 pct. That should further pave the way for an European
Central Bank rate cut, possibly on Aug 30, if not certainly in
September."
"Since the publication of the ECB monthly bulletin last week, the
euro has rallied quite significantly and therefore I am dubious as to
whether or not the euro can find some more upside on the anticipation
that we are going to see a rate cut soon," she added.
Dealers said the weakness of the US dollar against the yen and the
euro and how much further will it persist has remained the main theme
in the market place .
Foley pointed out that there seemed to have been some US dollar
purchases in US trading hours, suggesting that perhaps US investors are
a little more confident about a stabilisation in the economy.
Meanwhile sterling was soft against both the dollar and the euro in
early trade amid a lack of leads.
The yen continued to firm amid rumours that the Japanese Ministry
of Finance had cut short his holiday on concerns about the weakness of
the US dollar/yen pair, dealers said.
Foley cited talk that the ministry of finance would be more
prepared to enact intervention in support of the US dollar if it were
to maintain levels below 120, were rife.
However, analysts noted that in its attempts to talk the yen lower
through the minutes of its last meeting, the Bank of Japan last managed
to help send the currency back above the psychologically-important 120
level.
"The market is pretty nervous about intervention but there is a lot
of possibility that we are going to see repatriation back into the yen
in the next few weeks as the next month is the end of the half fiscal
year next month," she said.
© 1999-2024 Forex EuroClub
All rights reserved