Euro stays close to $0.86 in Tokyo trade

Published November 2nd, 2000 - 02:00 GMT

The euro stayed close to $0.86 in Tokyo Thursday as investors bought the currency on rumours that oil-producing nations might quote prices in euros, a dealer said. 

 

The European single unit traded at $0.8598 around 2:00 pm (0500 GMT), down from $0.8612 in New York, but up from $0.8540 in Tokyo late Wednesday. 

 

"Investors bought the euro as there was a rumour that Venezuela, Iran, Russia and Libya, following Iraq, may price oil bills in euro," Sanwa Bank dealer Mitsuru Sahara said. 

The UN sanctions committee on Monday gave authorization for Iraqi crude oil exports to be paid for in euros instead of dollars. 

 

"There is no legal basis to block the request," from Iraq for the switch to euros, a United Nations diplomatic source said at the end of the committee meeting. 

 

Recent weak US economic figures were also attributed to the stronger euro, and weaker dollar, the dealer said. 

"Since the release of weak US gross domestic product figures, no good (US economy) index has come out. Investors who had been overly optimistic about US fundamentals retreated from that position," Sahara said. 

The National Association of Purchasing Management reported on Wednesday that its overall price index fell to 48.3 in October from 49.9 in September as economic activity in the manufacturing sector declined for the third consecutive month. 

 

Weaker-than-expected US growth figures released last week had been followed on Tuesday by data showing a sharp drop in US consumer confidence. 

 

Against the yen, the euro traded at 92.94, up from 92.82 in Tokyo Wednesday afternoon. 

The dollar meanwhile bought 108.08-11 yen at 2:00 pm, down from 108.17 yen in New York, and 108.68 yen in Tokyo late Wednesday. 

"Ahead of the three-day weekend in Japan, investors were adjusting their positions," Sahara said.— (AFP)  

 

© Agence France Presse 2000  

 

 

 

 

 

 

 

 

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