Thursday July 30, 05:37 PM
Euro makes meagre gains against dollar
LONDON (AFP) - The European single currency edged up Thursday against the dollar on news of improving eurozone business and consumer confidence and despite a rise in US unemployment data, analysts said.
In late afternoon London trade, the euro rose to 1.4067 dollars from 1.4049 dollars in New York late on Wednesday. It was also up against the Japanese currency at 134.42 yen from 133.51 yen previously.
The dollar rose to 95.59 yen compared to 95.02 yen late on Wednesday.
The euro, which is seen as a riskier currency on financial markets and tends to do better than the "safe-haven" dollar during times of economic stability, also gained ground because of better than expected quarterly company results.
These came as an EU survey showed European business and consumer confidence firmed in July for the fourth month running, in a modest sign of encouragement for Europe's struggling economies.
"Better-than-expected confidence data gave a small boost to euro/dollar," said Credit Agricole (Paris: FR0000045072 - news) analyst Frederik Ducrozet.
"The rise in confidence was broad-based across sectors, echoing the global improvement in other surveys," he said.
The European Commission's economic sentiment indicator for the 16 nations using the euro single currency rose to 76.0 points in July from 73.2 points in June, continuing a gradual climb away from a record low 64.6 points in March.
The figure topped analyst forecasts for a rise to 75.3 points.
"Recovery of the industrial confidence indicator continued, backed by a further improvement in production expectations and normalisation in the level of stocks," the commission said in a statement.
But it noted that "both stocks of finished goods and production expectations remain below their long-term averages; more importantly, industrial activity remains weak, as manifested by the all-time low level of capacity utilisation."
The biggest signs of improvement in confidence were seen in Britain, up 5.0 points, and in Spain, Italy and Germany, while the rise in France, the Netherlands and Poland was marginal.
The economic optimism was dimmed however by official data showing new unemployment claims in the United States rose in the past week to 584,000.
But the four-week moving average -- sometimes seen as a more reliable indicator of trends -- fell by 8,250 from the prior week to 559,000.
Other details in the report also showed positive signs.
The number of people receiving unemployment benefits during the week ending July 18 was 6,197,000, a decrease of 54,000 from the preceding week. The four-week moving average fell by 131,750 to was 6,416,250.
Investors were meanwhile digesting the Federal Reserve's Beige Book survey which said the US economy was showing signs of stability and that the pace of decline in 12 major economic regions was moderating.
In London on Thursday, the euro was changing hands at 1.4067 dollars against 1.4049 dollars late on Wednesday, at 134.42 yen (133.51), 0.8520 pounds (0.8574) and 1.5329 Swiss francs (1.5268).
The dollar stood at 95.59 yen (95.02) and 1.0900 Swiss francs (1.0866).
The pound was at 1.6502 dollars (1.6377).
On the London Bullion Market, the price of gold edged up to 932.50 dollars an ounce from 931 dollars an ounce late on Wednesday.
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