• Home
• /
• Business

Euro, dollar steady as investors pause ahead of holidays

NEW YORK- The euro stabilized against the dollar Wednesday as investors turned cautious about economic prospects in a holiday-shortened week.

The euro was up slightly at 1.3277 dollars at 2100 GMT, from 1.3273 late Tuesday in New York.

Against the Japanese currency, the euro fell to 132.43 yen from 133.25.

The dollar also weakened against the yen, dropping to 99.74 yen from 100.38.

Although currencies will continue to trade electronically, leading stock markets in Europe will close Friday and Monday to mark the Easter Sunday holiday, while the US stock market will be closed Friday.

Analysts said there had been modest dollar selling following the US currency’s rebound last week, balanced by euro selling.

Earlier in the day the dollar had benefited from its safe-haven status but interest dropped after US stocks broke a two-day losing streak.

“The US dollar and Japanese yen were amongst the stronger currencies on Wednesday, though we’ve seen little in the way of ’breakouts,’ as the release of the Federal Open Market Committee’s (FOMC) meeting minutes from March wasn’t exactly groundbreaking since there was little in the way of new details revealed,” said Terri Belkas at Forex Capital Markets.

The Federal Reserve has lowered its outlook on the recession-mired US economy, seeing no glint of recovery until next year, according to minutes of a central bank meeting released Wednesday.

“Real GDP (is) expected to flatten out gradually over the second half of this year and then to expand slowly next year as the stresses in financial markets ease, the effects of fiscal stimulus take hold, inventory adjustments are worked through, and the correction in housing activity comes to an end,” the minutes of the March 17-18 FOMC meeting said.

The euro resisted the effects of more negative eurozone economic data.

Industrial orders in Germany, the eurozone’s largest economy, fell by 3.5 percent in February from the January level, official data showed, although the figures suggested that a long slide could be nearing the bottom.

In January, orders for industrial goods in Germany had dropped by 6.7 percent, the economy ministry said.

In another report the national statistics office said exports in Germany, the world’s biggest exporter last year, fell 23.1 percent in February from the same month in 2008.

Weighing on the euro Wednesday was increased speculation that the European Central Bank could lower eurozone interest rates again.

“It’s clear that we still have margins of maneuver. We’ll have to see how we use them,” the head of the French central bank, Christian Noyer, told BFM television, six days after the ECB cut rates by a quarter point to 1.25 percent.

Last Thursday’s cut was smaller than expected, leading to speculation that a further reduction in rates was possible.

Noyer heads France’s central bank and is an ECB board member.

In late New York trading, the dollar stood 1.1469 Swiss francs, up from 1.1431 late Tuesday.

The pound slipped to 1.4713 dollars from 1.4727.