LONDON, 10 August 2004 — The dollar held largely steady against the euro yesterday following Friday’s jobs data-related sell-off, but trading was volatile on the eve of the US Federal Reserve’s interest rate decision.
The single European currency stood at 1.2264 dollars in late European trading from 1.2277 late on Friday in New York.
The dollar was being traded at 110.56 yen against 110.55 on Friday.
The dollar stabilized after rebounding earlier in the day. But despite the rebound, downside risks remain for the US currency, with dollar bears in the ascendancy for now after Friday’s very disappointing non-farm payrolls data spooked the market, analysts said. The pound was flat meanwhile, with investors unwilling to take positions as they await the Bank of England’s latest quarterly inflation report due for release on Wednesday for clues as to what the next interest rate move might be after Thursday’s quarter-point hike.
Elsewhere, the Australian dollar outperformed after comments from the Reserve Bank of Australia suggested that further interest rate hikes were likely.
Meanwhile, European stocks retreated yesterday, with the London FTSE 100 index closing 0.54 percent lower at 4,314.4 points.
In Frankfurt, the DAX 30 fell 1.0 percent to 3,690.33, while in Paris the CAC 40 ended 0.89 percent lower at 3,497.30.
US stocks gained yesterday. The Dow Jones Industrial Average was up 19.09 points, or 0.19 percent, at 9,834.42. The S&P 500 was up 3.05 points, or 0.29 percent, at 1,067.02. The technology-laced NASDAQ Composite Index was up 2.73 points, or 0.15 percent, at 1,779.62.
The Tokyo stock market ended lower yesterday. The 225-issue Nikkei average ended at 10,908.70, down 63.87 points, or 0.58 percent. It was the lowest closing since May 18.
The Topix index of all first section issues shed 5.55 points, or 0.50 percent, to stand at 1,101.57. In Hong Kong, the benchmark Hang Seng Index ended down 0.09 percent or 11.27 points to 12,467.41.