Euro Trades Near One-Week High Against Dollar


The euro traded close to a one-week high against the dollar on speculation the European Central Bank will signal plans to keep interest rates on hold and the U.K. pound tumbled after a report showed a slump in house prices.

The 15-nation currency also rose to near a three-month high against the yen after ECB council member Axel Weber said yesterday policy makers remain focused on ensuring price stability. The pound fell to a record low versus the euro as home prices dropped the most since 1992. The ECB and Bank of England announce rate decisions this week.

The euro climbed to $1.5798, the highest since March 31, before trading at $1.5733 at 7:06 a.m. in New York, from $1.5711 late yesterday. It gained to 161.98 yen, the highest since Jan. 11, before trading at 160.82 yen, from 160.88 yen. The dollar was at 102.23 yen, from 102.40 yen.

The U.S. currency declined to 1.0103 Swiss francs, from 1.0131 yesterday, after former Fed Chairman Alan Greenspan told a conference in Tokyo via satellite that the extent of losses stemming from a collapse in the subprime-mortgage market won't be known for months. Data today will show U.S. pending home sales fell 1 percent in February after no change the previous month, according to a Bloomberg survey.

The pound slumped to an all-time low against the common European currency on speculation the Bank of England will lower interest rates on April 10 as U.K. economic growth slows. British home prices tumbled 2.5 percent last month, the biggest drop since 1992, HBOS Plc said today. The pound traded as low as 79.86 pence per euro, from $1.9883.

Central bankers at the meeting played down the euro's 17 percent jump against the dollar in the past year and indicated they won't push for the Group of Seven countries to criticize it when they meet in Washington on April 11. ECB Vice President Lucas Papademos told reporters the G-7 message on currencies ``would be the same'' as at the February meeting.


TradingEconomics.com, Bloomberg
4/8/2008 6:46:40 AM