- NEW YORK (Reuters) - The
dollar weakened across the board in thin and technically driven trading
on Monday, with the euro hitting a new high as confidence grew that euro
zone policy-makers will not intervene just yet to halt the currency's
surge.
-
- Extremely low liquidity owing to seasonal holidays in
most of the northern Hemisphere, including London, the hub of global
foreign
exchange trading, made it easier for the few traders at their desks to
move the market.
-
- Small purchases triggered pre-placed stop-loss buy
orders,
which lifted the euro as high as $1.3639. Amid a lack of fundamental news
such as U.S. economic data, traders were trying to take out options
barriers
around the $1.3600 level, dealers said.
-
- The euro also rose to its highest in 18 months against
the yen as traders assessed the economic impact from the deadly tsunami
that devastated parts of Asia on Sunday.
-
- "Nothing has changed: it's still sell dollars on
rallies," said a trader at a large U.S. bank in New York. "Small
orders are driving this."
-
- Larry Brickman, currency strategist at Bank of America
in New York, said there was no fresh fundamental economic reason for the
move and agreed that the thin conditions helped magnify the market's deeper
trend.
-
- "It's more of the same, more dollar weakness and
a continuation of the same theme going into the new year," Brickman
said. "We don't think the ECB is going to come in," he said,
referring to potential intervention from the European Central Bank to stem
the euro's rise.
-
- In a newspaper interview on Friday, Dutch Finance
Minister
Gerrit Zalm said the euro's rise was still within acceptable margins,
suggesting
little official alarm at the pace of the rise.
-
- At around 11:30 a.m. EST (1630 GMT), the euro was up
0.8 percent at $1.3635 (EUR=: Quote, Profile, Research) and stronger at
140.48 yen (EURJPY=: Quote, Profile, Research) , having risen to highs
of 140.80 yen earlier in New York.
-
- The dollar slipped 0.6 percent to 103.08 yen (JPY=:
Quote,
Profile, Research) and was 0.8 percent down at 1.1337 Swiss francs (CHF=:
Quote, Profile, Research) .
-
- Sterling added 0.6 percent to $1.9356 (GBP=: Quote,
Profile,
Research) and the Australian dollar was more than 1 percent stronger at
$0.7774 (AUD=: Quote, Profile, Research) .
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