CURRENCY: The euro remained range-bound against the dollar in late trade yesterday, a day after a sharp sell-off, but traders warned of further selling pressures in the days to come.
The euro eased to $0.8812 from $0.8819 late on Wednesday in New York. Earlier, the euro had slipped below 88 US cents, after worse-than-expected German fourth-quarter gross domestic product data, and newspaper reports suggesting Germany may get a warning from the European Commission for approaching its 3 per cent budget deficit ceiling.
Reported euro selling by Spanish banks to maintain their asset positions in light of the Argentinian crisis also hit the currency hard.
Chief currency strategist at BNP Paribas Mr Hans Redeker felt the euro could slip to below 86 US cents in the next couple of weeks as confidence ebbed from the currency.
He said jobless claims figures in the US provided further evidence that the labour market was stabilising, providing additional support to the dollar. US initial claims fell 14,000 to a seasonally adjusted 384,000.
Mr Paul Mackel, currency strategist at Dresdner Kleinwort Wasserstein, agreed and said the near-term outlook for the euro was bad.
"The dollar has got the upper hand," he said.
• The European Central Bank's governing council met yesterday, but issued no statement.
