Global General

Special

Newsmaker

Asia Pacific

America

Middle East

Europe

Africa

Euro slightly higher against dollar

(Agencies)
Updated: 2009-02-05 22:24

FRANKFURT _ The euro was a little higher against the dollar on Thursday, while the British pound fell as markets awaited interest rate decisions in Europe.

Related readings:  The Euro Ark has proved doomsdayers wrong  Euro inflation hits two-year low  Slovakia adopts euro to shield vibrant economy  Euro currency turns 10; seen fulfilling promise

The 16-nation euro bought $1.2863 in morning European trading, up slightly from $1.2856 late Wednesday in New York. The pound fell to $1.4409 from $1.4461.

Both the European Central Bank and the Bank of England were due to decide on interest rates later Thursday.

ECB President Jean-Claude Trichet has indicated that his Frankfurt-based bank will likely hold rates for the 16-nation euro zone steady at 2 percent.

However, the Bank of England is expected to chop rates by as much as half a percentage point. That would take its benchmark rate to a fresh historic low of 1 percent.

"Although there's a high degree of confidence in the market that Frankfurt will hold pat, the book is a little more open in London," said James Hughes, a currency analyst at CMC Markets in London.

Somewhat better-than-expected British economic data and a belief that the central bank "should do everything possible to conserve the remaining fire power has opened up the debate once again," he added.

Lower interest rates often drive investors from a currency as they move funds where they earn better returns.

In other trading, the dollar bought 89.56 Japanese yen Thursday, barely changed from its level of 89.54 late Wednesday.