The euro rose against the dollar for the first time in three days on
speculation European policy makers will say today they remain concerned
about inflation as a report showed German exports gained the most in
almost two years. The ECB decided to keep
rates at 4.25 percent today.
The currency rebounded from near an eight-week low before a European
Central Bank meeting at which President Jean-Claude Trichet may focus
on risks for consumer-price growth. Deutsche Lufthansa AG workers
received a 5.1 percent pay increase from the German airline to stay
ahead of the fastest inflation in more than 16 years.
Trichet said July 3 he had ``no bias'' or ``pre-commitment'' after
policy makers increased the main refinancing rate a quarter- percentage
point. Since then, government reports including retail sales and
consumer confidence showed economic growth is flagging.
German sales abroad in June increased 4.2 percent from May, when they
fell 3.4 percent, the country's Federal Statistics Office in Wiesbaden
said. That's the biggest increase since September 2006. Economists
expected a gain of 1.8 percent, the median of 12 forecasts in a
Bloomberg News survey showed.
Separately, the Bank of England kept its
key rate at 5 percent.
EUR/USD rebounded from $1.5400 and printed session low on $1.5480. Later rate traded within to $1.5440/80 range.
GBP/USD consolidated within the $1.9470/$1.9515 range before Bank of England decision pushed cable to $1.9520. Offers $1.9520/30, more toward $1.9550. Bids $1.9485/80, $1.9450.
USD/JPY was under pressure and before US session pressed the lower bound of the day's range Y109.20/70.