6 September 2006, 10:44  US dollar was mixed in afternoon

The US dollar was mixed in afternoon Sydney trade ahead of data releases, the key being the Federal Reserve's Beige Book which is likely to provide further insight on the pace of economic growth in the US, dealers said. They said attention is also turning to Japan ahead of Friday's Bank of Japan meeting. Although no change is expected in Japan's interest rates, the market is waiting for Friday's speech by Bank of Japan governor Toshihiko Fukui. It will be a chance to hear his views following the Aug 25 revision of consumer price index data for July that showed inflation was much tamer than the market thought. That could point to the central bank holding off from further rate hikes for a while. The Bank of Japan raised its interest rate on July 14 to 0.25 pct, the first rise in almost six years. The US dollar was at 116.42 yen, up from 116.37 in mid Sydney morning trade while the euro was at 1.2815 usd from 1.2819 usd. Westpac Bank Corp head of currency strategy, Robert Rennie, said the market was relatively quiet although the Australian dollar weakened on softer than expected second quarter gross domestic product data. Rennie said the weaker data was largely due to a fall in inventories and did not necessarily signalling the economy's growth was slowing at an unexpected pace. Nevertheless, he said, the weaker growth means the Reserve Bank of Australia is likely to delay any further rate rises after leaving its official cash rate at 6.00 pct this morning after hiking the rate 25 basis points last month. "Right now it is hard to get excited about anything in the market but that will change with a flow of data releases later in the week," Rennie said.

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