25 September 2001, 15:00 Forex - Euro steady midday in London ahead of US consumer confidence data
ONDON (AFX) - The euro was steady at morning levels against the
dollar in midday trade, as investors awaited US consumer confidence
data which will give the market the first sign of how badly confidence
has been damaged by the terrorist attacks that took place two weeks
ago, dealers said.
"There is a focus on oil prices and the consumer confidence this
afternoon," Adrian Schmidt, at Royal Bank of Scotland said.
"Weak oil prices are usually euro positive but not many positions
are being taken at the moment," he added.
The yen was slightly stronger, drifting higher in a pattern seen
after previous Bank of Japan interventions. Dealers said focus was on
the outcome of today's meeting between US President George W Bush and
Japanese Prime Minister Junichiro Koizumi.
Neil MacKinnon, senior currency strategist at Merrill Lynch, said
forex traders and investors will be alert to any joint intervention to
stabilise dollar-yen.
However, he said the BoJ's forex intervention "is unlikely to do
much to weaken the yen given the already ample levels of liquidity in
the system".
"Repatriation flows look powerful enough to thwart BoJ intentions,"
he added.
Schmidt at RBoS said there was not a huge amount of activity going
on in yen.
"The BoJ put a floor under it (the yen) and it is not expected to
break that floor," he said, adding that the floor was "116-ish".
Sterling was largely unchanged after UK second-quarter current
account and final GDP data.
"The data was decent," Schmidt said.
"Growth was a bit stronger and the current account deficit a bit
narrower than people expected. But weak oil prices are offsetting
these," he added.
UK second-quarter GDP -- at constant 1995 market prices -- rose 0.4
pct from the first quarter, for a 2.3 pct year-on-year increase, while
the UK's current account was 3.895 bln stg in deficit on a seasonally
adjusted basis in the second quarter, compared with a downwardly
revised shortfall of 1.574 mln in the previous three months.
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