20 August 2003, 12:54  Euro slips as positive data props dollar

The euro slipped in early deals today, as the dollar continued to gain from the latest US data, which underpinned expectations for a rebound in the second half. Although the eurozone is also starting to look brighter, the signs have yet to become strong enough to boost the euro, which at 0900 was trading at USD1.1130, and STG0.6994. With no US data due for release today, geopolitical issues could remain in focus. However, French Q2 GDP due for release this morning is likely to diminish the appeal of the euro, according to Geraldine Concagh of AIB.
"Growth is forecast to be flat q-on-q, which would be consistent with the eurozone wide flat growth outcome. There are downside risks to the data, which could prompt talk of another cut in eurozone interest rates," she said. Also of note, the Bank of England releases the minutes of its August meeting at 0930. Rates were left on hold at 3.5pc and the voting is expected to have been unanimous. According to Concagh, sterling, which has also been hit by the wave of dollar optimism but remains in a tight range against the euro, will be looking for indications that rates are on hold from here. //www.fxcentre.com

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