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Euro drifts lower against US dollar

Euro drifts lower against US dollar

The euro drifted lower against the U.S. dollar Thursday after the head of the U.S. central bank said it was ready to "act as needed" to keep credit market troubles from expanding across the broader economy.
The 13-nation euro bought US$1.3630 in morning European trading, down from US$1.3645 in New York late Wednesday. The British pound dropped to US$2.0091 from US$2.0151.
Fed Chairman Ben Bernanke noted on Wednesday that the bank was "prepared to act as needed" to ensure credit market troubles did not expand further, fueling speculation that a U.S. interest rate cut could be the offing next month from the current level of 5.25 percent.
Analysts also have raised doubts about prospects of the European Central Bank raising its key refinancing rate to 4.25 percent next month, following mounting problems with credit availability.
Higher interest rates, used to combat inflation, can strengthen a currency by giving investors higher returns on investments denominated in it.
The dollar edged higher against the Japanese currency, rising to 115.49 yen from 114.88 after Vice Finance Minister Horoki Tsuda the ministry would keep a close eye on financial markets and subprime mortgage concerns.
"I will watch moves of stocks and foreign exchange markets closely as well as various economic indicators," he told reporters in Tokyo on Thursday. "But basically, the Japanese economy remains on a long-lasting recovery path."


Updated : 2021-06-20 19:56 GMT+08:00