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Nation

Euro rebounds against dollar

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LONDON (AFP) - The dollar edged higher against the yen yesterday and stemmed a fall against the euro following the release of a stronger-than-expected US consumer confidence survey, dealers said.

Europe's single currency climbed to 1.3710 dollars from 1.3697 late on Monday in New York.

The dollar rose to 119.10 yen from 119.03 late on Monday.

In New York, the Conference Board reported a sharp and unexpected jump in consumer confidence, with its headline index reaching a six-year high of 112.6 in July, from a revised 105.3 in June and well above forecasts for a reading of 105.0.

"The jump in US consumer confidence to its highest level since August 2001 reflects the ongoing resiliency of the US consumer amidst rising earnings and full employment," Bank of New York analyst Michael Woolfolk commented.

Trading movements were nonetheless limited, with markets still jittery after last week's sudden bout of risk aversion amid fears that troubles in the US subprime lending sector would spread to all areas of global credit markets.

"Overall, the environment is still dollar negative," said Ian Stannard at BNP Paribas.

He added that market players would be looking for excuses to move back in and sell the US currency.

At UBS, Daniel Katzive felt that "financial market sentiment is showing some further signs of stabilization."

Analysts pointed to gains on equity and credit markets, while carry trades -- where money is borrowed in low-yielding currencies like the yen to invest in higher-yielding assets -- also showed signs of picking up.

That saw the dollar remain above 119 yen for the first time in five days.

The euro was changing hands at 1.3710 dollars, against 1.3697 dollars late on Monday, 163.26 yen (163.05), 0.6737 pounds (0.6764) and 1.6523 Swiss francs (1.6476).

The dollar stood at 119.10 yen (119.03) and 1.2028 Swiss francs (1.2028).

The pound was being traded at 2.0347 dollars (2.0247).

On the London Bullion Market, the price of gold rose to 665.83 dollars per ounce from 661.50 dollars late on Monday.

vuukle comment

BANK OF NEW YORK

CONFERENCE BOARD

DANIEL KATZIVE

DOLLARS

IAN STANNARD

IN NEW YORK

MICHAEL WOOLFOLK

NEW YORK

ON THE LONDON BULLION MARKET

PARIBAS

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