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Forex - Euro edging back up to all-time dollar high ahead of G7
LONDON (Thomson Financial) - The euro is edging back up towards its highest ever level against the dollar as investors continue to sell the US currency ahead of this weekend's G7 meeting of finance ministers and central bankers in Washington. With the US Treasury seemingly unconcerned by the slide in the dollar and the Europeans talking about the need to sort out global imbalances rather than direct comments on the US currency's weakness, market participants think little will be said in this weekend's communique. 'With the G7 stopping short of a direct call for a stronger dollar (or weaker euro), the dollar downtrend should extend further,' said Steve Pearson, currency strategist at HBOS. Earlier the euro hit a high of 1.4242 usd, not far off its all-time high of 1.4282 usd, achieved at the start of October. Even strong US data of late has done little to stem the dollar selling tide and investors will be keeping a close eye on a speech on the economic outlook this evening from US Federal Reserve chairman Ben Bernanke. The market's conviction that last month's 50 basis point rate reduction from the Fed marked the start of a series of rate cuts has diminished sharply because of relatively firm US data and record oil prices. The Fed slashed its benchmark interest rate by 50 basis points last month to 4.75 pct as it sought to restore market confidence following the onset of the credit crunch. 'The market's conviction in the Fed's readiness to implement further near-term cuts in US interest rates has taken a battering of late but whether the balance of market sentiment is tipped any further in this direction will obviously depend largely on forthcoming data,' said Simon Derrick, currency strategist at Bank of New York Mellon. 'Given that rising energy prices appear to be making their mark once again, Wednesday's US CPI in particular could play a significant role in influencing the market's monetary policy presumptions,' he added. Dealers said they were also closely monitoring the Chinese Communist Party's 17th Congress which opened Monday. Chinese President Hu Jintao said in a speech that the Chinese yuan currency will 'gradually' be made fully convertible, but provided no timetable for the move. China regularly comes under fire from major trade partners for artificially keeping down the value of its currency in order to make its exports cheaper on international markets. London 1222 BST London 0917 BST US dollar yen 117.73 up from 117.69 sfr 1.1800 up from 1.1795 Euro usd 1.4223 up from 1.4220 yen 167.49 up from 167.36 sfr 1.6788 up from 1.6775 stg 0.6967 down from 0.6976 Sterling usd 2.0411 up from 2.0381 yen 240.35 up from 239.90 sfr 2.4089 up from 2.4042 Australian dollar usd 0.9064 up from 0.9057 stg 0.4439 down from 0.4442 yen 106.75 up from 106.58 [size=1][color=silver][email][email protected][/email] /pp/cm2 COPYRIGHT Copyright Thomson Financial News Limited 2007. All rights reserved. The copying, republication or redistribution of Thomson Financial News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Financial News. [/color][/size]