The euro slipped further from a seven-month peak against the dollar and a record high versus the yen on Friday, a day after the European Central Bank chief smothered market expectations for an interest rate rise in May.
After the ECB kept its key overnight rate at 2.5 percent as expected on Thursday, Jean-Claude Trichet said the central bank did not share the same view as the market, which had girded for a clear signal that the ECB would tighten policy next month.
With the market's gaze firmly trained on rate differentials among major currencies, the dollar had suffered against the euro all week on building expectations for such a signal from Trichet.
"The market was positioned exactly against what he ended up saying," said Luke Waddington, head of forex trading at Royal Bank of Scotland in Tokyo.
Selling of the single European currency continued as some market players also sought to reduce their long-euro positions ahead of a US employment report.
The market expects the data to shed some light on whether the US Federal Reserve will soon end a nearly two-year credit tightening campaign, possibly in May.
The Fed has raised rates 15 times since mid-2004, pushing its funds rate to 4.75 percent. The run of hikes was a major driver of the dollar's 15 percent rally last year against the euro and the yen.
The euro had slipped 0.2 percent to $1.2200, well off a seven-month peak of $1.2333 hit before the ECB chief's remarks.
It fell about 0.2 percent to 143.70 yen on renewed selling in Asia, extending losses from 144.88 yen hit on electronic trading platform EBS the previous day -- the highest since the euro was launched in January 1999.
Comments
Comments are closed.