Euro, sterling weaken

Euro, sterling weaken

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The euro weakened against the US dollar on Thursday after the European Central Bank held interest rates at 4 percent and Bank president Jean-Claude Trichet declined to phrase his comments using words that usually signal a rate increase coming at the next meeting of the Bank.

While Mr. Trichet said that the Bank will continue to “monitor closely� conditions that might indicate pressures toward inflation in the Eurozone, he did not say that “strong vigilance� would be exercised.

The wording of Mr. Trichet’s comments led analysts to believe that if another rate hike is in the cards for this year, it won’t come until at least September.

While the euro remained ahead of the yen and sterling in midday trade in New York, it had dropped 0.1 percent to $1.3595 in relation to the greenback.

The shared currency added 0.2 percent versus both the yen and sterling, to ¥167.10 and £0.6760 respectively.

Sterling also declined versus the US currency, falling by 0.3 percent even though the Bank of England hiked interest rates in the UK to 5.75 percent.

The greenback was helped by a new services sector survey as the Institute for Supply Management’s non-manufacturing index was at 60.7 in June, up from 59.7 in May.

The dollar added 0.1 percent to SFr1.2185 in relation to the Swiss franc, while it gained 0.2 percent to ¥122.92 against the yen.