The dollar was lower against major currencies, particularly against the euro, on reports that Venezuela may be diversifying its reserves away from the dollar. The reports follow news yesterday that Venezuela has transferred 20 bln usd worth of its reserves to the Bank for International Settlements in Switzerland. Domingo Maza Zavala, the head of Venezuela's central bank told El Nacional newspaper that it seems appropriate to increase the country's euro holdings and cut the dollar holdings given that the dollar has weakened against the euro. The euro has risen sharply against the dollar overnight and this morning, rising well above the 1.20 usd level and pushing towards 1.21 usd. HBOS currency analyst Steve Pearson noted that previously Venezuela has suggested it held only a small amount of non-dollar reserves, and if it were to move in line with the largest emerging market nations -- which currently hold 40-45 pct of reserves in non-dollar currencies -- it would imply a one-off sale of around 10 bln usd. However, Pearson said it is likely that a large portion of this has already been put through the market and in itself the news is therefore not of sufficient importance to reverse the current trend in euro/dollar trading. Meanwhile, in focus today will be the European Central Bank's latest interest rate decision and accompanying press conference this afternoon, which could give the euro a boost. Although rates are fully expected to be left on hold at 2.0 pct, many in the market are hoping that ECB policy makers could be leaning more towards a rate hike in the coming months, in light of recent stronger euro zone data and hawkish remarks from ECB officials. Meanwhile, the pound reacted little to news that the UK housing market continues to improve, with the latest Halifax survey showing prices up 1.2 pct in September from August. The Bank of England's monthly interest rate decision at noon today is likely to be something of a non-event for currency markets, with rates fully expected to be left unchanged at 4.50 pct. The details of the Monetary Policy Committee's discussion will not be known until Oct 19 when the minutes to the meeting are released. This morning sees the release of UK manufacturing and industrial production data for August, which is expected to show a slight improvement on July.