Dollar holds steady against euro

Business Materials 19 November 2007 21:59 (UTC +04:00)

The dollar held relatively steady against the euro and the pound Monday amid a lack of market-moving economic news, but traders said concerns about the US economy continued to weigh on the dollar.

The euro, which has spiked strongly against the dollar this year, was changing hands at 1.4665 dollars compared with 1.4659 dollars late Friday.

The eurozone currency surged above 1.47 dollars briefly last week, flirting with its record high of 1.4752 dollars struck on November 9.

Market participants said the dollar remains under pressure from fears of slowing US economic growth. Interest rate cuts in September and October have also driven the dollar lower.

The economic concerns were supported by sharp falls on US and global stock markets. The Dow Jones Industrial Average stock barometer lost 1.66 percent to 12,958.44 points in afternoon trading.

"The US dollar remained relatively unchanged on a quiet start to the week's currency trading, and dollar traders remained on the defensive ahead of an unpredictable holiday-shortened week," said David Rodriguez, a currency analyst at Forex Capital Markets, referring to the Thanksgiving holiday.

"A lack of new economic data gave markets little directional bias," Rodriguez said.

The economic news flow has slowed this week although the Federal Reserve will be releasing the minutes from its last interest rate policy meeting on October 30-31 Tuesday.

The release is likely to be closely tracked by the foreign exchange markets for hints on future rate moves. The Fed next meets on December 11.

The US currency was in the spotlight over the weekend at a summit of the powerful oil cartel OPEC, where there was talk of abandoning the weak dollar in the pricing of OPEC oil.

"The dollar is falling, all heads of state were upset ... because of the dollar. The value of their (financial) reserves has dropped," Iranian President Mahmoud Ahmadinejad said at the weekend summit in Saudi Arabia as he described the dollar as "worthless."

OPEC leaders agreed that oil and finance ministers from the group would look at pricing oil with a basket of currencies, a move that could reduce volatility of prices but might further weaken the US currency, according to analysts.

The pound was quoted at 2.0497 dollars compared with 2.0546 late Friday.

In late US trade, the dollar stood at 1.1149 Swiss francs from 1.1175. The dollar fell to 109.74 yen, against 111.07 yen late last week. ( AFP )