16 January 2004, 15:25  Euro slips as dollar correction continues

The euro remains in corrective mode this morning, trading well off Monday's high at USD1.2507 in early deals as markets continue to react to this week's raft of defensive comments from eurozone officials. "Given the rapid scale of the euro's ascent over the last couple of months a corrective move was due and the dollar's current rebound could push it back to USD1.25 and even below," said Geraldine Concagh of AIB Global Treasury.
"However, we remain unconvinced about a longer-term dollar recovery, with US interest rates at very low levels and the current account deficit, although showing some signs of stabilising, still a worry," she added. After rising strongly in the opening days of 2004, the euro appears to be taking a breather ahead of next month's G7 meeting, with the subject of the dollar's decline expected to be a major topic for discussion. Europe is likely to complain about the scale of Japan's intervention, which has left the euro to bear the brunt of the dollar's adjustment.//www.fxcentre.com

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