Euro rises against dollar ahead of ECB meeting

Published October 4th, 2000 - 02:00 GMT

The euro rose against the dollar in Tokyo Wednesday on speculation the European Central Bank (ECB) might hike interest rates, a dealer said. 

 

The European single currency traded at $0.8769 around 2:00 pm (0500 GMT), up from $0.8751 in New York and little changed from $0.8771 in Tokyo late Tuesday. 

"There are expectations in the market that the ECB may raise interest rates at Thursday's meeting," Fuji Bank dealer Wako Ogawa said. 

 

The ECB is scheduled to meet to discuss whether the euro-zone and its flagging currency could benefit from another rise in interest rates. 

 

The euro was also boosted on the back of Tuesday's decision by the US Federal Reserve to leave interest rates unchanged, he said. 

 

But in a statement, the Fed cautioned the markets on continuing inflationary pressures in the world's biggest economy, noting surging oil prices pose "a risk of raising inflation expectations." 

"Investors who had not been worrying about inflation launched selling of the dollar as they were reminded of the concerns," Ogawa said. 

 

Investors remained wary of intervention to support the euro following the coordinated action on September 22 by the ECB, US Federal Reserve and Bank of Japan, the dealer said. 

"Investors are cautious of another intervention," Ogawa added. 

 

Little direction was expected for the euro ahead of the ECB meeting, said a dealer at BNP Paribas in Singapore. 

"Unil then sentiment towards the euro will stay weak," he said.  

Against the yen, the euro traded at 95.38, compared with 95.38 yen in Tokyo late Tuesday. 

 

The dollar meanwhile traded at 108.77-79 yen, down from 108.88 yen in New York and 108.76 yen in Tokyo late Tuesday. 

The greenback slipped on exporter-led selling, dealers said.— (AFP)  

 

© Agence France Presse 2000  

 

© 2000 Mena Report (www.menareport.com)

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