The euro held its head above parity against the dollar in early deals today, as continued uncertainty over the state of the US economy pressured the greenback According to dealers, the Federal Reserve's decision to slash interest rates by 50bps and its shift in policy risk assessment have created more uncertainty than they dispelled
They added that inaction by the Bank of England and the European Central Bank had been rewarded, although the situation in the eurozone is anything but rosy and euro gains are once again more to do with dollar weakness than any fundamental faith in the single currency and EMU economies Meanwhile, data flow today is light, though this morning's German industrial production numbers should support expectations of a rate cut next month from the ECB. Elsewhere, today's United Nations Security Council resolution on Iraq will also be a key focus
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