3 December 2001, 11:56 Forex - Euro steady in early London trade ahead of euro zone PMIs
LONDON (AFX) - The euro was steady in quiet early trade ahead of
the euro zone Purchasing Managers Index due out at 9.00 am, dealers
said.
But a weak reading could well dent sentiment on the euro, taking
it below day highs, they added.
"No one wants to take bets on the euro ahead of the PMIs," Nick
Parsons, currency strategist at Commerzbank, said but noted that a weak
outturn is only likely lead to mild selling pressure.
Market position is already on the short side anticipating a weak
reading. The most probable scenario is a brief dip on the euro as any
initial selling is unlikely to be followed through by widespread
sell-offs, he said.
Further, the euro appears to be very firm against the Swiss Franc
and sterling. This should limit any potential fall against the dollar,
he added.
The MSCI reweightings which kicked in late Friday did not have an
impact on the euro, Parsons noted.
Sterling was little changed against the dollar but continued to look
softer against the euro.
With the Bank of England seen unlikely to reduce interest rates
further this Thursday, weak house price readings in both the Halifax
and Nationwide surveys this week are likely to highlight flagging
consumer demand, Parsons said.
Elsewhere, Enron Corp's troubles continued to weigh on the dollar
while the yen remained little changed across the board.
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