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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