16 June 2005, 13:55  Dollar near 9-month high vs euro

The dollar held near nine-month highs versus the euro on Thursday ahead of a European Union leaders' summit after the recent French and Dutch rejection of the EU constitution threw the bloc into political disarray. Weaker-than-expected U.S. capital flows and inflation data this week have slowed the ascent of the dollar -- which is still up 10 percent against the euro this year, boosted by expectations that U.S. interest rates would rise further. In contrast, the prospect for the euro zone remains bleak with investors looking to European Central Bank officials speaking later for hints as to whether they would need to cut interest rates in the near future to boost sluggish growth. "The market is looking to the EU summit as well as U.S. data as the dollar has struggled to overcome $1.20 in the past three days," said Carsten Fritsch, currency strategist at Commerzbank in Frankfurt.

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