The euro moved back to where it was early in the day this evening, with volatility in the US stock market keeping players from taking fresh risks. At 1720, the single currency was trading at USD1.1324, while against sterling it was at STG0.6938. So far the US earnings season remains inconclusive and analysts are divided on whether the US is on the recovery path. Given this, all eyes will be fixed on the quarterly results due later this evening from Yahoo and biotechnology group Genentech, analysts said.
They said a bearish earnings season may end the rally on Wall Street and spell fresh trouble for the dollar. Many have attributed the dollar's recent rally to a stronger outlook for the US economy. The European Central Bank (ECB) will announce its decision on interest rates tomorrow, with analysts expecting a hold. However, the market will be keen to see if ECB head Wim Duisenberg will shift his bias towards cutting. Last week he appeared to rule out imminent cuts, but the continued weakness of the eurozone economy has led to repeated calls for a another snip to spur activity. //www.fxcentre.com