LONDON, 20 July 2004 — The dollar firmed against the euro in lackluster trading yesterday as dealers awaited Congressional testimony from US Federal Reserve Chairman Alan Greenspan today and tomorrow for hints on US interest rate policy.
The single European currency in late-day trade was at 1.2432 dollars against 1.2451 late on Friday in New York.
The dollar was meanwhile trading at 108.30 yen, down from 108.68 on Friday.
The US currency slumped late Friday following the release of weaker-than-expected US inflation figures, as well as data indicating a steep decline in US asset inflows in May.
Greenspan is expected to confirm that the Fed continues to believe that US monetary policy should be tightened in a measured fashion. The testimony is unlikely to contain any surprises for the market, however, with analysts forecasting only limited impact on currency dealing.
The yen was also stronger and was the only major currency to make any notable headway against the dollar. But analysts pointed to volatility resulting from Japan’s markets being closed for a public holiday yesterday as a possible factor, with thin trading enabling larger movements.
Meanwhile, European stock markets began the week downbeat yesterday in the wake of an uninspiring opening on Wall Street, with investors remaining cautious about corporate earnings.
In London the FTSE shed 0.42 percent to close at 4,321.1 points, in Paris the CAC 40 fell 0.49 percent to 3,592.63, while in Frankfurt the DAX gave up 0.87 percent to end the day at 3,812.63.
The DJ Euro Stoxx 50 index of leading euro zone shares slipped 0.49 percent to 2,699.86 points.
Elsewhere in Europe, Madrid’s Ibex-35 slipped 0.37 percent to 7,981.4 points, Amsterdam’s AEX fell 0.64 percent to 326.68, Brussels’ Bel-20 lost 0.86 percent to 2,432.54, Milan’s Mib 30 dipped 0.20 percent to 27,552 and the SMI index of Swiss shares fell 0.58 percent to 5,429.7.
The Dow Jones Industrial Average lost 55.25 points, or 0.54 percent, to 10,084.53. The broader Standard & Poor’s 500 Index fell 2.48 points, or 0.23 percent, to 1,098.91. The technology-laced NASDAQ Composite Index was down 8.94 points, or 0.47 percent, at 1,874.21.
Asian stock markets were mixed to firmer yesterday.
In Hong Kong, the Hang Seng Index closed up 107.75 points or 0.89 percent at 12,166.95, off a low of 12,033.22 and a high of 12,172.97 and turnover of 10.32 billion dollars ($1.32 billion).
The Hang Seng China Enterprises Index was up 108.45 points or 2.53 percent at 4,401.
