18 May 2001, 12:26 Forex: Euro drifts lower in early London trade on ECB concerns, MSCI fears
LONDON (AFX) - The euro drifted lower in early trade as the
European Central bank once again left investors puzzled, dealers said.
"The market is somewhat concerned by the admission from the ECB
(yesterday) that they have made an even greater (positive) error in
their calculation of M3 figures of up to 1 percentage point, against
the 0.5 which they previously said," Neil Parker, a strategist at Royal
bank of Scotland said.
"This led the market to believe that more cuts were on the way as
could be assumed, but then they came out and said they won't be
cutting, leaving the market confused," he added.
Dealers said that an expected decrease in the weight of European
shares in the Morgan Stanley Capital index to be announced tomorrow was
also undermining sentiment for the single currency.
Sterling also drifted lower tracking the euro, dealers said.
"There is nothing going on in sterling, neither technically or
fundamentally," Parker said.
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