Dollar mixed ahead of Europe and U.K. central bank meetings

14:15, October 08, 2009      

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The dollar was against major currencies on Wednesday as investors waited for the monetary policy meetings of the European Central Bank (ECB) and the Bank of England (BoE).

It was widely expected that the ECB and the BoE would keep their interest rates unchanged at historically low levels. Investors were closely watching comments from the central banks after the meetings.

Some analysts expected the ECB will keep its benchmark rate on hold until the euro zone economy is well on its way to recovery. The euro zone economy is pulling out of recession but downside risks remain, ECB Governing Council member Axel Weber said on Tuesday.

Deutsche Bank AG cut its forecast for dollar-euro exchange rates as the U.S. Federal Reserve is expected to keep rates lower than other nations. The dollar will trade at 1.40 dollars per euro by the end of next year, after weakening to 1.55 dollars per euro in the first quarter, according to the world's biggest currency trader. Its previous forecast for yearend 2010 was 1.15 dollars per euro.

Japanese Finance Minister Hirohisa Fujii said the current strength of the yen is consistent with acceptable market activity, the Wall Street Journal reported on Wednesday.

Fujii said measures are needed in case foreign exchange market movements are outrageously reckless or acting without any order, but he reiterated that authorities should not intervene in foreign exchange markets in an excessive way.

The euro bought 1.4671 dollars in late New York trading compared with 1.4710 dollars it bought late Tuesday. The pound rose to 1.5938 dollars from 1.5911 dollars.

The dollar rose to 1.0637 Canadian dollars from 1.0598 Canadian dollars, and rose to 1.0342 Swiss francs from 1.0275 Swiss francs. It fell to 88.63 Japanese yen from 88.81 Japanese yen.

Source: Xinhua
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