Monday July 13, 05:43 PM
Dollar dips before data, earnings
LONDON (AFP) - The dollar dipped against the euro on Monday as the market geared up for a batch of US economic indicators and second-quarter earnings results from troubled American banks, dealers said.
In late morning London trading, the European single currency edged up to 1.3971 dollars from 1.3939 dollars in New York late on Friday.
The dollar was stable against the Japanese currency, at 92.24 yen from 92.52 yen late Friday.
Market players were bracing themselves ahead of US inflation, manufacturing activity and housing reports this week, following poor American employment data released earlier this month.
They were also turning their attention to crucial earnings results from battered US banks Goldman Sachs (NYSE: GS - news) , JPMorgan Chase, Bank of America (NYSE: IKJ - news) and Citigroup (NYSE: C - news) .
"The emergence of risk aversion, as investors' concern over the scale of global economic recovery intensifies, persists as the key market theme," said Derek Halpenny, a currency analyst at The Bank of Tokyo-Mitsubishi UFJ in London.
"On the immediate horizon this week will be a deluge of data from the US. The FOMC minutes on Wednesday will be one highlight with upgraded forecasts that will inevitably include much higher unemployment projections."
The Federal Open Market Committee (FOMC) is to publish the minutes of its meeting in late June when it maintained its aggressive effort to lift the US economy out of recession, holding its base rate near zero, as it predicted a gradual rebound without inflation.
Disappointing data this week may meanwhile put renewed pressure on the dollar, which last week fell to a five-month low of 91.80 yen. Many investors regard the yen as a safe investment in times of economic uncertainty.
"We have noticed increased dollar buying from Japanese life insurance companies which could signal better support for the dollar against the yen," added Halpenny.
"However, we will wait for a clear turn in risk before signalling the potential for the dollar to rebound."
Looking ahead, Audrey Childe-Freeman (FREEMAN.HK - news) of the bank Brown Brothers Harriman said forthcoming industrial data for Germany and the eurozone were "potentially supportive for the euro."
In London trade on Monday, the euro was changing hands at 1.3971 dollars against 1.3939 dollars late on Friday, 128.98 yen (128.97), 0.8656 pounds (0.8598) and 1.5147 Swiss francs (1.5126).
The dollar stood at 92.54 yen (92.52) and 1.0868 Swiss francs (1.0851).
The pound was at 1.6103 dollars (1.6205).
The Russian ruble fell again, having already lost 4.5 percent of its value last week amid weakening oil prices, approaching what some analysts are calling a "danger zone."
The dollar-euro basket that serves as a reference currency for the ruble was trading at 38.49.
On the London Bullion Market, the price of gold fell to 908.50 dollars an ounce from 913 dollars an ounce late on Friday.
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