The dollar held near a one-week high against the euro on Tuesday on optimism about the US economy as the market awaited comments from Federal Reserve Chairman Alan Greenspan.
Dollar bulls hope that Greenspan will underscore the strength of the economy when he speaks later on Tuesday and again on Thursday, giving the dollar another shot in the arm.
However, with some still doubting the strength of the economy, most traders do not expect the dollar to extend gains by much, especially ahead of the week's big US data event - the non-farm payrolls report on Friday.
"The market is still range-bound. In the last six months or so, anybody who thought the dollar could break out of ranges lost money," said a trader at a European bank.
"I don't think that's going to change for now."
The euro fetched around $1.2271 not far from the one-week low of $1.2257 hit in New York on Monday but still wedged in its $1.20-24 range of the past several months.
The dollar rallied broadly on Monday after a meeting of Group of Seven finance leaders on Friday did not offer any surprises, and on relief that G7 members did not pressure China to revalue the yuan.
Sterling bought $1.7852 after hitting a two-week low of $1.7815 in New York.
The dollar was also not far from Monday's two-week high of 1.2678 Swiss francs, parked at around 1.2654 It was at 110.87 yen compared with about 111.00 in late US trade.
Some analysts said the market was biding its time before the announcement of US payrolls figures for September.
The data should show an increase of 155,000 new jobs, up from 144,000 in August, according to a Reuters poll.
A rise in US share prices in the past week helped boost optimism in the US economy, supporting the dollar.
Meanwhile, the euro was also under pressure from the yen as market players unwound long positions taken before last week's "tankan" survey of corporate sentiment.
"Ahead of the 'tankan', expectations for a weak reading had been weighing more on the yen versus the euro than the yen versus the dollar, so we're seeing a correction of those positions right now," said Hideaki Furumaya, forex manager at Trust and Custody Services Bank.
Comments
Comments are closed.