The euro eased in early trade today, as the dollar continued to milk the better than expected unemployment figures released yesterday. At 0930, the euro was down a touch at USD1.1729, while against sterling, which is tracking dollar trends at the moment, the single currency was also lower, at STG0.7055. "It's actually a relief to see the euro give up some of its recent gains, given the rapidity of its rise, but the underlying trend of dollar depreciation hasn't really lost any of its momentum," said Niall Dunne of Ulster Bank Financial Markets. But he added, "Given the absence of any major US data, and the absence of Japanese intervention in the market, there's little reason to expect a major USD bounce today".
According to Dunne, the release of the US trade balance for August later today will dictate the direction of the euro. "A figure worse than minus-USD41bn will hurt the dollar, less than USD41bn will boost the greenback," he said. Dunne also noted that the Japanese appear to be backing away from the FX market ahead of US President Bush's official visit to Tokyo next week. //www.fxcentre.com